How your Property Tax is Calculated
Different formulas are used for calculating different types of property tax values although there are some commonly used methods. When it comes to assessing properties and valuing them, though, the process can be a bit more complex than simply punching numbers into a formula. Generally, property taxes are calculated by taking the assessed value of the properties and multiplying it by the tax rate that has been set forth by the local government. Any applicable exemptions are then subtracted from that total. It may sound simply put but another factor affects property taxes, and that factor is true and fair market value.
Fair Market Value
Fair market value is basically the market value of the property that is the amount of money that a buyer of property who is under no obligation to buy would be willing to pay for it from a seller who’s selling the property and is under no obligation to do so. All the potential uses of the property are taken into consideration when determining fair market value as well.
Assessing Personal Property Tax
Personal property tax is assessed based on the market value to the current owner of the property. It is usually assessed at the retail trade level, which is the value of the property to the owner after it’s installed and in operation. The retail trade level is quite different from the wholesale trade level since the wholesale trade level is generally set at a discounted price level for people to buy for resale and not use.
Assessing Commercial Property Tax
State laws require that their county assessors assess commercial properties at 100 percent of their true and fair market values in money. Those property tax values must be according to the highest and best use of the property as well. Commercial property taxes are usually valued by combining sales with the income and cost approach.
Assessing Industrial Property Tax
Industrial property, like commercial property, must be valued at its true and fair market value and according to its highest and best use. It doesn’t matter whether the industrial property is classified as real property or personal property. It still must be assessed in this manner. However, most industrial property tax is valued by using a trending guide like the Industrial Valuation Tables that are published by the Department of Revenue.
Assessment Technologies Valuation Strategy
Assessment Technologies helps you get lower property taxes by creating a unique valuation strategy based on research and property information gathered by tax experts. If Assessment Technologies believes that your property is being overassessed, then their law experts can help you file an appeal on the assessment.