Assessors are required to determine values in accordance with Mass Appraisal Methods. A market analysis is conducted each year using property sales data from the 12 months prior to the assessment date for the given fiscal year. It is important to note that the Assessors must value property as of January 1 which precedes the start of the fiscal year. The assessed value, which first appears on the 3rd quarter tax bill, is based on the previous January 1 and sales from the year before that. This may cause confusion to taxpayers who see properties selling today which seem to reflect a different market. A fee appraiser would typically value your property as of the current date of inspection.
There are three approaches to value:
- sales comparison
- cost approach
- income approach
The most commonly used approach is the sales comparison. The cost approach is based on replacement cost of a structure as if it were built new today (not at the time it was built), less depreciation. The income approach is based on an analysis of income and expense information and can be utilized as a valuation method for revenue generating properties.