Understanding Your Assessment

TAXATION: Taxing authorities such as school districts, city councils and county governments set tax rates and levy taxes. We know that Taxpayers DEMAND SERVICES, taxing authorities REQUIRE MONEY to provide those services.

If you are concerned about rising taxes:

  • Attend school, county and municipal budget hearings
  • Call or write the taxing authority
  • Decide whether you are willing to do without services to keep taxes low
  • Work for efficiency in government

VALUATION: Buyers and Sellers in the market CREATE VALUE. The Assessor’s office studies the market and collects information about properties to ESTIMATE VALUE.

The Assessor’s office has no control over tax rates.

WHAT CAUSED PROPERTY VALUES TO CHANGE?

A property’s value can change for many reasons. The most obvious is that the property changes. A bedroom, garage or swimming pool is added, or part of the property is destroyed by flood or fire. The most frequent cause of a change in value is a change in the market. If a town’s major industry leaves, property values can collapse. As decaying neighborhoods with good housing stock are discovered by young homebuyers, prices gradually rise, and then may soar as the neighborhood becomes fashionable. A shortage of detached houses in a desirable city neighborhood can send prices to ridiculous levels. In a recession, larger homes may stay on the market for a long time, but more affordable homes are in demand, so their prices rise. In a stable neighborhood, with no extraordinary pressure from the market, inflation may increase property value.

IF ASSESSED VALUE RISE, DO TAXES HAVE TO RISE? NO
IF ASSESSED VALUE FALLS, DO TAXES HAVE TO FALL? NO

Taxing authorities decide how much money they will budget for a given year. They are limited by legislative set spending limits called CAPS. Let’s say that the budget for the year will be $1 million. Assessors estimate the total assessed value of all taxable property, say $100 million. A tax rate is calculated by dividing the amount of tax to be raised by the total assessed value:
$1 million / $100 million = 1 percent

If your home’s assessed value is $100,000, your tax bill will be .01 x $100,000 = $1,000
If total assessed value doubles, and the amount to be raised stays the same, the tax rate will be $1 million / $200 million = 1/2 percent. Your taxes, if your home doubles in value, will still be $1,000: .005 x $200,000 = $1,000.

If assessed value increases, and the tax rate remains the same, taxes will rise. The taxing authorities are demanding more money, even though they have not changed the rate.

Example: .01 x $200,000 = $2,000

If you believe the estimated value of your property is incorrect, you will want to know:

  • How the assessor values property
  • How to gather information about your property and similar properties
  • How the appeals process works and what the deadlines are

SEE THE APPEAL PROCESS LINK

You also have a responsibility to furnish good information about your property to the assessor.