 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.

Presentation on theme: " 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."— Presentation transcript:

 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 =.00126 This factor is called the Mill Levy. The mill levy multiplied by each properties value provides the taxes for that property. \$150,000 x.00126 = \$190 \$250,000 x.00126 = \$315 \$75,000 x.00126 = \$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 85-100% 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

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