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The Property Tax

The Property Tax. The Property Tax is made up of two basic components:. 1) Budget needs (Taxes). 2) Estimates of Market Value ( Assessed Values). Let’s look at budget needs (taxes) first. Budget Needs What do we use tax dollars for ?. Taxes are used for :. Schools.

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The Property Tax

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  1. The Property Tax

  2. The Property Taxis made up of two basic components:

  3. 1) Budget needs(Taxes) 2) Estimates of Market Value (Assessed Values)

  4. Let’s look atbudget needs (taxes) first...

  5. Budget NeedsWhat do we use tax dollars for ?

  6. Taxes are used for : • Schools

  7. Taxes are used for : • Police Services

  8. Taxes are used for : • Parks & Recreation

  9. Taxes are used for : • Fire & Rescue

  10. Taxes are used for : • Library

  11. Taxes are used for : • Streets

  12. Taxes are used for: Administrative Services

  13. Budget NeedsWe see that each Department of Government has a budget...

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

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

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

  17. Duties of the Assessor

  18. Up until now we have talked about budget needs (taxes)...

  19. Now let’s talk about how these budget needs are assigned...

  20. ...to each residence and business in our community...

  21. ...so everyone pays their “fair share”of taxes.

  22. It’s done by relating to the AssessedValue.

  23. Let’s see how that’s done...

  24. The guiding principle behind the property tax:

  25. “The value of property ownedis an indication of one’s ability to pay taxes”.

  26. State Laws have been written to reflect this idea and to guide the assessing process.

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

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

  29. Cost • Income • Sales Comparison

  30. Cost Value based on actual building costs depreciated for various factors.

  31. Income Value based on income and expenses of rental property.

  32. Sales Comparison Value based on sales of property.

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

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

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

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

  37. The Assessor must consider every factorthat adds to or subtracts from property value.

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

  39. House Size • Small • Medium • Large

  40. Location • Close to Schools • Pleasant Neighborhoods

  41. Age of House • Older houses • Newer Houses

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

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

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

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

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

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

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

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

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