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What is an Assessment and How Does it Affect Me?

What is an Assessment and How Does it Affect Me?. Assessments. 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

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What is an Assessment and How Does it Affect Me?

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  1. What is an Assessment and How Does it Affect Me?

  2. Assessments • 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

  3. How Assessments Determine Taxes $100,000 $100,000 $100,000 In 2000 a contractor builds three identical homes in a county. All are assessed for $100,000.

  4. How Assessments Determine Taxes 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 $100,000 $100,000 $100,000

  5. How Assessments Determine Taxes A :$150,000 B : $250,000 C: $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.

  6. How Assessments Determine Taxes 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 $150,000 $250,000 $75,000

  7. How Assessments Determine Taxes So lets compare a few scenarios: The budget is $600 except where stated otherwise

  8. Other Factors • 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.

  9. State Factors • 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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