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Rural land valuations

Rural land valuations. Agricultural land adjoining non-agricultural land and the relationship between their assessed values. Dan Pittman Sarpy County Assessor May 2010. photos.

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Rural land valuations

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  1. Rural land valuations Agricultural land adjoining non-agricultural land and the relationship between their assessed values. Dan Pittman Sarpy County Assessor May 2010

  2. photos All real property in the State of Nebraska is subject to taxation and shall be valued at 100% of its actual (market) value. However, agricultural and horticultural land is a separate and distinct class of property for purposes of property taxation and is not valued at 100% of actual (market) value. Agricultural and horticultural land is valued at 75% of actual (market) value.

  3. What is Agricultural Land and Horticultural Land? Agricultural land and horticultural land is a parcel of land primarily used for agricultural or horticultural purposes. Agricultural and horticultural purposes means commercial production of any plant or animal in a raw or unprocessed state that is derived from the science and art of agriculture, aquaculture, or horticulture.

  4. In Sarpy County, the majority of raw land is in the path of urban and suburban development and sells for commercial or residential use.

  5. Land sale prices are beyond the lands worth for farming or ranching as a livelihood. So, the State provides for “Agricultural Special Valuation (Greenbelt)” to prevent an excessive property tax burden on agricultural and horticultural activities.

  6. Home Site Dry Crop Qualifications for receiving greenbelt have changed significantly since the early 1980’s. The constant requirement has always been that the land be “primarily” (predominantly) in an agricultural or horticultural use. Equally important is the understanding that land directly associated with any building or enclosed structure is not to be considered agricultural or horticultural land.

  7. In 2008, a significant change was made to the State law regarding “primary” agricultural use. Formerly, the use of the whole parcel of land was to be considered in determining primary use. Now, only that portion of land that is not related to buildings or enclosed structures is to be considered when determining primary use.

  8. The State collects agricultural and horticultural land sales, that are beyond the influence of urban growth, from surrounding counties. These “uninfluenced” sales of agricultural land assist Sarpy County in determining the actual value (market value) of land qualifying for Agricultural and Horticultural Special Valuation (Greenbelt).

  9. So, what do we know …………………… The State Statutes define what constitutes agricultural and horticultural use. 2. The assessor verifies that portion of land contained in a parcel to be considered for agricultural or horticultural use. 3. Land sales information from neighboring counties are provided to Sarpy County by the State to help value land primarily involved in agriculture and horticulture. Up to this point we have addressed how land is determined to be primarily agricultural and how the Agricultural Special Valuation has been determined. However ………………………………………………

  10. There are other land uses that are not considered agricultural or horticultural. House & Ponds House &Storage Grain bins & Pole buildings

  11. “There are other land uses on a agricultural or horticultural parcel which are not classified as agricultural land and horticultural land uses. All of these will need to have market studies conducted by the assessor to determine the proper assessment of the land. Other land uses shall not be classified as agricultural and horticultural land and shall be assessed at 100% of actual or market value.” Title 350, Chapter 14, REG 14-005.01, Rev. 3/15/09

  12. In 2010, the assessor conducted use verification on all agricultural parcels using the current 2007 aerial maps. Soil determinations are from the Natural Resources Conservation Service (NRCS). The predominant use of non-agricultural and non-horticultural determines which market data is to be analyzed in establishing its market value. The markets identified in the rural areas of Sarpy County: • Residential • Developmental • Commercial/Industrial • Recreational

  13. In the rural areas of Sarpy County the single family, rural residential market is the predominant market identified for that portion of land adjoining agricultural land and identified as non-agricultural by state statute. With the market identified, i.e. single family, rural residential, we can select sales of comparable properties to analyze and model in the process of establishing market values.

  14. Sales In Sarpy County , there are 240 residential neighborhoods. Five of which are considered comparable rural residential neighborhoods. State regulations direct the assessor to use sales for statistical analysis dated between July 1, 2007 through June 30, 2009. The following are the qualified sales used in the 2010 valuation that fall within this time period:

  15. There are sales outside of the five rural residential neighborhoods that are agricultural and comparable to the single family, rural residential market. State regulations direct the assessor to use sales for statistical analysis dated between July 1, 2006 through June 30, 2009. The following are the qualified sales used in the 2010 valuation that fall within this time period:

  16. Why does land sell for different prices per acre based on size? The Economic Law of Diminishing Marginal Utility explains this: As a consumer obtains larger and larger quantities of a commodity or service, the consumer will tend to value additional units at a lesser rate than they valued the previous unit.

  17. Valuation Model Mass Appraisal models attempt to represent the market for a specific type of property in a specified area. IAAO Standard on Mass Appraisal of Real Property- 2008 The basic cluster model provides the value based on one and only one variable – Land Size. The basic model cannot address any particular amenity or deficiency a lot may have. The predicted value is only a starting point prior to which adjustments may or may not be applied to determine the final value.

  18. After analyzing sales the model is calibrated with the sales within the mandated time periods.

  19. Summation In closing, the rural areas of Sarpy county continue their steady transition to residential, commercial, and recreational uses. The county assessor faces the challenge of following this ever-changing market, collecting the sales data, and applying the appropriate valuation methods. Simultaneously, the assessor must conform to frequent changes in the State Laws. The following are websites with helpful information:

  20. Websites: Sarpy County Government: www.sarpy.com Nebraska Dept. of Revenue: www.revenue.state.ne.us International Association of Assessing Officers: www.iaao.org

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