MONEY AND FINANCE

Tax Property Records

Tax Property Records

Tax property records are the records of how your real and personal property are taxed by the appropriate jurisdictional authority in your state. Generally, all taxing statutes and codes are passed by the state and acted upon by the local tax assessor.

As a matter of policy, a tax assessor has a threefold responsibility. He must first, discover then list and third, value all property subject to taxation. This is applicable to both real and personal property as defined by law.

In order to determine the value of the taxable property, one or more of three methods are used. The most common is the market approach. This is where the appraiser looks at similar properties which have sold, adjust for the differences, and estimate the price the subject property might sell for.

The income approach is also used. The appraiser estimates the amount of money the subject property might rent for based on similar properties that are being rented. The appraiser then divides the annual income, minus expenses, by a reasonable interest rate. This rate is called the capitalization rate and is determined by local market rates.

The third method appraisers use is called the cost approach. The cost approach determines what it would cost to purchase a vacant parcel and build a structure, or structures, with similar utility as that of the subject property. This method is pretty straightforward and gives the appraiser and easy to present value.

Some states require the Assessor to establish the “taxable value” by determining the “full cash value” of the land and adding to that the estimated replacement cost of improvements (buildings, etc.) less appropriate depreciation. They also require the Assessor use a national valuation service recognized by the various recognized appraisal organizations.

The Assessor may also be required to determine the taxable value for all real property subject to taxation each year. If a property owner feels that the “taxable value” of their property has exceeded the “full cash value” (market value) or was arrived at incorrectly they may appeal to an appeals board. These boards are usually at county level with the final appeal board at state level.

Remember, each jurisdiction operates under rules specified by statute or code. Hence, if you believe you have been appraised incorrectly, your first step is to contact the Assessor and determine the proper steps to begin an appeal. You may end up at state level if you are not satisfied with the results of your appeal. And this why you need to keep track of your tax property records, you may need them against some taxation injustice.

Money and Finance