 An assessment is the value placed on a property for taxing purposes ◦ This value can be determined by a combination of means:  Sales of this property or similar properties  Replacement/Construction cost of a property  Income created by a property (commercial) ◦ One or more of these methods is used to calculate the assessed value of a property

$100,000 In 2000 a contractor builds three identical homes in a county. All are assessed for $100,000.

$100,000 These are the only three properties in the county. The county budget is $600. To determine how much of the budget each property will pay the budget is divided by the total assessment for the county. $600/$300,000 =.002 This factor is called the Mill Levy. The mill levy multiplied by each properties value provides the taxes for that property. $100,000 x.002 = $200

A :$150,000 B : $250,000C: $75,000 So ten years down the road the houses have changed. House A has been maintained at a normal level. House B has had its basement finished and a garage built. House C has been used as a rental, never updated and is in desperate need of a new roof and some foundation work.

$150,000 $250,000 $75,000 These are the only three properties in the county. The county budget is $600. To determine how much of the budget each property will pay the budget is divided by the total assessment for the county. $600/$475,000 = This factor is called the Mill Levy. The mill levy multiplied by each properties value provides the taxes for that property. $150,000 x = $190 $250,000 x = $315 $75,000 x = $95

So lets compare a few scenarios: The budget is $600 except where stated otherwise House AHouse BHouse C Original Houses$100,000 $200 $100,000 $200 $100,000 $200 Only Budget Increases ($900) $100,000 $300 $100,000 $300 $100,000 $300 All Assessments Increases Evenly $200,000 $200 $200,000 $200 $200,000 $200 Reassessment$150,000 $190 $250,000 $315 $75,000 $95 Some Assessments Decrease $75,000 $180 $100,000 $240 $75,000 $180 All Assessments Decrease $75,000 $200 $75,000 $200 $75,000 $200

 There are actually three factors used to determine a properties taxes: ◦ Assessed Value ◦ Mill Levy ◦ State Factor  Assessed Value x Mill Levy x State Factor = Taxes  For our previous examples: ◦ we assumed a state factor of 1 or 100% ◦ however the state factor changes every year and can vary from 85% to 100%.  That is you pay taxes on between % of your total assessed value every year as determined by the state.

 Last Year the State Factors for Fall River County were as follows: ◦ Ag properties: 85% ◦ Non-Ag properties: 94.6%  This means that those with properties classified as Ag paid taxes on only 85% of their assessed value while those with Non-Ag properties paid taxes on 94.6% of their assessed value