1. Lets look at how the assessor’s office fits into city government
Governments need dollars to run all of the things we need.

2. The
Property Tax

3. The Property Tax is made up of two basic components:
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

4. 1) Budget needs (Taxes) 2) Estimates of Market Value (Assessed Values)
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

5. Let’s look at budget needs (taxes) first...
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

6. Budget Needs What do we use tax dollars for ?

7. Taxes are used for :
Schools

8. Taxes are used for :
Police Services

9. Taxes are used for :
Parks & Recreation

10. Taxes are used for :
Fire & Rescue

11. Taxes are used for :
Library

12. Taxes are used for :
Streets

13. Administrative Services
Taxes are used for:
Administrative Services
Lets look at how the assessor’s office fits into city government
Governments need dollars to run all of the things we need.

14. Budget Needs We see that each Department of Government has a budget...

15. Department Budget Library $$$$ Police $$$$$ Fire & Rescue $$$$$
Parks & Recreation $$$$
Public Works $$$$$$$
Schools, Etc $$$$$$$ Total Budget = $$$$$$$$

16. The total budget
is called the
“tax levy”

17. “The total budget dollars needed to run municipal services”
The tax levy:
“The total budget dollars needed to run municipal services”

18. Duties of the
Assessor

19. Up until now we have talked about budget needs (taxes)...
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

20. Now let’s talk about how these budget needs are assigned...
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

21. ...to each residence and business in our community...
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

22. ...so everyone pays their “fair share” of taxes.
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

23. It’s done by relating to the Assessed Value.
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

24. Let’s see how that’s done...
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

25. The guiding principle behind the property tax:
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

26. “The value of property owned is an indication of one’s ability to pay taxes”.
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

27. State Laws have been written to reflect this idea and to guide the assessing process.
The record card identifies all the characteristics that add value to houses
We compare houses that have sold to houses that have not in order to estimate value.

28. By State Law then… each home and an estimate of value.
every business must
be assessed based on
an estimate of value.

29. “approaches” for estimating value for real property.
Assessors use three
“approaches” for estimating value for real property.

30. Cost
Income
Sales Comparison

31. Value based on actual building costs depreciated for various factors.

32. Value based on income and expenses of rental property.

33. Sales Comparison
Value based on
sales of property.

34. We will look at the process for estimating market value based on sales of
properties…
“Sales Comparison”.

35. “Market Value” : An estimate of what a home or business would sell for under normal market conditions.

36. Assessors call these estimates of market value “assessed values”

37. How does the Assessor’s Office estimate Market Value?

38. The Assessor must consider every factor that adds to or subtracts from property value.

39. What makes one house sell for more, or less, than another house?

40. House Size
Small
Medium
Large

41. Location
Close to Schools
Pleasant Neighborhoods

42. Age of House
Older houses
Newer Houses

43. Other things that affect value:
Construction Quality
Number of Bedrooms
Number of Bathrooms
Family Room
Decks/Patios/Gazebos
Recreation Room, etc

44. Assessors’ must:
Go to each home and business to record all attributes which contribute to value.

45. Assessors’ must:
Maintain these records annually to include all changes that affect value.

46. Assessors’ must:
Determine all neighborhood influences on property value.

47. Assessors’ must:
Determine any special influences on property value (such as contamination).

48. Review all sales of property on an ongoing basis.
Assessors’ must:
Review all sales of property on an ongoing basis.

49. Enter all data in a record maintenance system.
Assessors’ must:
Enter all data in a record maintenance system.

50. Assessors’ must:
Statistically analyze all factors contributing to value and adjust to reflect current sales of property.

51. Generate estimates of value on each property annually.
Assessors’ must:
Generate estimates of value on each property annually.

52. Assessed Values are generated by comparing each house to similar properties that have recently sold, and adjusting for differences.

53. Let’s look at a sales grid for a simplified example of how that’s done!

54. Let’s assume the houses in our example are the same age, size, physical condition, quality and in the same neighborhood.

55. Simplified Sample data:
Bedroom = $3, Bath = $2, Fireplace = $ Garage = $6,000

56. This is a sales grid showing “Our House”...
Bedroom = $3, Bath = $2, Fireplace = $ Garage = $6,000

57. …and sale information about similar houses...
Bedroom = $3, Bath = $2, Fireplace = $ Garage = $6,000

58. …along with examples of factors that affect value.
Bedroom = $3, Bath = $2, Fireplace = $ Garage = $6,000

59. The sale properties are adjusted for differences to match “Our House”.

60. When we are finished we should have an estimate of what “Our House” would sell for...

61. …giving us an example of an assessed value.

62. Let’s adjust the
first sale for any
differences from
“Our House”...

63. The only difference is in the number of baths...
Bedroom = $3,000 Bath = $2, Fireplace = $ Garage = $6,000

64. So, we
adjust by
adding $2,000.
Bedroom = $3,000 Bath = $2, Fireplace = $ Garage = $6,000

65. Giving an adjusted value of $102,000. $102,000
Bedroom = $3,000 Bath = $2, Fireplace = $ Garage = $6,000

66. Sale 2 needs several adjustments $102,000
Bedroom = $3,000 Bath = $2, Fireplace = $ Garage = $6,000

67. ...for an adjusted value of $113,500 -$3,000 -$2,000 -$1500 $102,000
Bedroom = $3,000 Bath = $2, Fireplace = $ Garage = $6,000

68. Sale 3 needs several adjustments...
Bedroom = $3,000 Bath = $2, Fireplace = $1500 Garage = $6,000

69. …and Sale 4 needs one adjustment...
Bedroom = $3,000 Bath = $2, Fireplace = $ Garage = $6,000

70. Go ahead and adjust
sales #3 and #4 on
your work sheet to reflect
the differences between
the sales properties
and “Our House”...

71. -$3,000
+$3,000
-$2,000
+$2,000
+$2,000
-$1,500
+$1,500
+$3,000
$102,000
$113,500
$97,500
$97,000
Bedroom = $3,000 Bath = $2, Fireplace = $ Garage = $6,000

72. -$3,000
+$3,000
-$2,000
+$2,000
+$2,000
-$1,500
+$1,500
+$3,000
$102,000
$113,500
$97,500
$97,000

73. -$3,000
+$3,000
-$2,000
+$2,000
+$2,000
-$1,500
+$1,500
+$3,000
$102,000
$113,500
$97,500
$97,000

74. -$3,000
+$3,000
-$2,000
+$2,000
+$2,000
-$1,500
+$1,500
+$3,000
$102,000
$113,500
$97,500
$97,000

75. -$3,000
+$3,000
-$2,000
+$2,000
+$2,000
-$1,500
+$1,500
+$3,000
$102,000
$113,500
$97,500
$97,000

76. Now that you have valued “Our House”...

77. …go ahead and do all the parcels in this municipality...

78. …remembering to account for all the other variable factors...

79. ...that affect an estimate of value:
age, size, physical condition, quality, neighborhood, etc.

80. It’s a massive and exacting job requiring much diligence and attention to detail.

81. Let’s look next at
the “fairness” issue:

83. “The fair distribution
Equitable Values
“The fair distribution
of the tax levy...

84. techniques in an even-handed manner.”
... characterized by
applying valuation
techniques in an even-handed manner.”

85. no single taxpayer or group of taxpayers...
In other words,
no single taxpayer or group of taxpayers...

86. ...is to be assessed in such a manner that an unjust tax burden would result.

87. The goal: No one is to pay more, or less, than their fair share of the tax levy.

88. As economic conditions change, values must be adjusted to prevent inequitable assessments.

89. Example #1
Demand for one house
style over another may
change with time, and
with fashion.

90. Example #2
Demand for one neighborhood over another may
change with time.

91. Much of the Assessor’s work goes to accounting for these constant changes!

92. What happens when a property owner disagrees with the assessed value?

93. The
Appeal Process

94. Three Steps:
1) Open Book
2) Board of Review
3) Higher Appeals

95. Open Book:
Informal review of the assessment roll at the assessor’s office–meet with your assessor.

96. Board of Review:
Formal presentation of evidence of value before a board of your peers.

97. Higher Appeals:
Appeal in the Court System or Department of Revenue, depending on circumstances.

98. The
Revaluation Process

99. State law requires assessments to be within 10% of market value once every 5 years.

100. As we have seen, market conditions are constantly changing.

101. Over time it becomes necessary to review all of the properties in a municipality…

102. To bring all property values back into line with actual market conditions…

103. That’s called a “Revaluation”.

104. In a revaluation, all properties are reviewed, along with all of the factors contributing to value.

105. Assessors attempt to visit every home and business to verify property data.

106. Changes in property data are noted and all properties are adjusted for varying market conditions.

107. How will a revaluation affect my taxes?
The #1 Question:
How will a revaluation affect my taxes?

108. We will look at two scenarios regarding the affect of revaluations on taxes:

109. The year before a revaluation
Taxing Authorities Budget:
$1,000,000
“Newtown” Assessed Value: $100,000,000
Tax Rate:= $1,000,000/$100,000,000=.010
Tax on home assessed at $100,000:
$100,000 X .010 = $1,000 Tax

110. In Revaluation Year
“If Assessed Value doubles but budget (levy) remains the same”
Taxing Authorities Budget:
$1,000,000
“Newtown Assessed Value:
$200,000,000

111. ( Value doubles but budget remains the same)
In Revaluation Year
( Value doubles but budget remains the same)
Tax Rate:
$1,000,000/$200,000,000 = .005
Home now assessed at $200,000:
$200,000 X .005 = $1,000 Tax

112. In other words, even if the assessed value of a house doubles in a revaluation year, but the budget remains the same, the taxes on that house will remain the same as the prior year.

113. In Revaluation Year
“If the Budget increases 10% but there is no change in assessed value”
Taxing Authorities Budget:
$1,000,000 X 1.10 = $1,100,000
“Newtown Assessed Value:
$100,000,000

114. ( Budget increases 10% but no change in assessed value)
In Revaluation Year
( Budget increases 10% but no change in assessed value)
Tax Rate:
$1,100,000/$100,000,000 = .011
House still valued at $100,000
$100,000 X .011 = $1,100 Taxes

115. In other words, even if the assessed value of a house stays the same in a revaluation year, but the budget
increases, the taxes on that house will increase, under typical circumstances.

116. We have reviewed the duties of Assessing Officers as they prepare the annual assessment roll.

117. We have seen how State laws and regulations guide the assessing process.

118. We have observed the #1 goal of the professional
Assessing Officer:

119. Using all of our resources, we generate assessed values...

120. …so everyone can pay their fair share of the budget (taxes)...

121. …and everyone can enjoy the benefits of living here!

122. Thank You!