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Overview of Property Tax Valuation and Equalization.

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Presentation on theme: "Overview of Property Tax Valuation and Equalization."— Presentation transcript:

1 Overview of Property Tax Valuation and Equalization

2 Property Tax Base All real and personal property is subject to tax on its value except: –Exemptions provided by constitution or statute Government property, some nonprofits, seniors’ residences (partial), household goods, business inventories.

3 Assessed Value=Market Value State Constitution requires uniform assessments. State statute sets assessment standard as 100% of true and fair value (Market Value). –Except open space, farm land, and forest land have special assessments below market value. Market Value: –The amount of money a willing buyer will pay to a willing seller for this property with knowledge of the market.

4 Who Determines Value? County Assessor values most real and personal property. Department of Revenue values the operating property of utilities located in more than one county. Valuation methods: –Sales Comparison –Income Approach –Cost Approach

5 How close are assessed values to market value? Department of Revenue checks the assessed values against actual sales prices each year. –The “Ratio” of assessed value to market value is calculated. Assessors are valuing property at about 90% of market value. –Ratios range from 74% of market value to 96% of market value. Local assessed values are adjusted (equalized) up to market value for: –Distribution of the state property tax across counties –Allocation of funds under the school levy equalization formula

6 Adjusting (equalizing) the 2002 State Property Tax Rate for differences in Assessment Levels State Property Tax Rate = $2.71 per $1,000 of value (at 100% of market value) County Ratio Rate Adams Asotin Benton Chelan Clallam Clark Columbia Cowlitz Douglas Ferry Franklin Garfield Grant Grays Harbor Island County Ratio Rate Jefferson King Kitsap Kittitas Klickitat Lewis Lincoln Mason Okanogan Pacific Pend Oreille Pierce San Juan Skagit Skamania County Ratio Rate Snohomish Spokane Stevens Thurston Wahkiakum Walla Whatcom Whitman Yakima State Total Ratio = Assessed Value/Market Value Rate in Dollars per $1,000 of Assessed Value

7 Adjusting the School District Value for differences in Assessment Levels Levy Equalization Formula uses Assessed Value per Student. Within the levy equalization formula: –School district assessed values are adjusted using the ratio of assessed value to market value. –This procedure makes assessed value per student comparable across school districts.

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