What is Assessed value of a Home?
An assessed
value is the dollar value assigned to a property to measure applicable taxes. Assessed valuation determines the value of a residence for tax purposes and
takes comparable home sales and inspections into consideration.
A property's fair market value
(FMV) is a determination of what price the property would probably sell for if
it were available on the open market. FMV is based on a
number of factors, including size, features and condition of the property,
supply and demand in the local housing market and recent market history (e.g.,
what similar nearby properties sold for within the past 18 months). While
anyone can calculate a property's FMV, only determinations made by licensed property
appraisers are considered valid by mortgage lenders and local property tax
offices.
The following was from Polk county Iowa assessor website:
Market Value
· An estimate of the price a property would sell
for on the open market on January 1 of the assessment year
· Sometimes referred to as an "arms length
transaction" or "willing buyer/willing seller" concept
Supply and Demand in the Three Approaches to
Value
· The common element in all three approaches is
that they must contain terms that represent the workings of both the supply and
demand sides of the market
· Each approach uses different sources of data to
represent supply and demand
Accurate Market Data
· All the approaches to estimate value depend in
some way on market information
· Assessor records must contain complete and
accurate information about the sales prices and conditions of properties sold
in the jurisdiction
·
Change
·
Market value is never
constant because physical, economic, social, and government forces are at work
to change the property and its environment.
· Sales Ratio
·
In Iowa, residential and
commercial property is assessed at 100 percent market value. Therefore, sale
prices and assessed values must stay in sync. If the median assessment to sale
price ratio (e.g. assessments divided by sale prices) in any given area
deviates from the statutory 100 percent level by a difference of more than plus
or minus 5 percent, the Iowa Department of Revenue steps in and mandates an
across the board adjustment to bring things back into compliance. This is called equalization , and is generally not a good thing because it means all property
values are affected, when usually only some are causing the problem.
·
A number of counties in
Iowa have very few property sales in a given year. It is for this reason the
Iowa Department of Revenue and Finance conducts appraisal of randomly selected
property in each county-- they use this information to calculate assessment /
appraisal ratios. In Polk County, this information is usually not received in
time to be used in the assessment process, but it can be important in
determining whether or not an equalization order will be forthcoming.
·
Arms
length transaction
·
A sale between two
unrelated parties, both seeking to maximize their positions from the
transaction
·
Sales
ratio
·
Sales Ratio = Assessed
Value of the property / Sale Price of the property
Current Sales Statistics
o Includes only deed sales that the assessor
believes are "good" for market analysis
o Sales with partially constructed dwellings
are excluded
o Sales with multiple dwellings are excluded
o Includes only deed sales that the assessor
believes are "good" for market
· Protesting
Your Assessed Value
· Property owners who
disagree with the assessor’s estimate of the market value of their property
should ask themselves, "Could I sell this property for that amount
today?" If the answer is yes, then the value is probably correct. However,
every property owner has the right to appeal an assessment. Remember that your
protest and the information you use to support your appeal should be based on
your property’s actual value on the assessment date (January 1).
·
Property
owners may appeal their initial assessments to local boards of review by filing
a written protest between April 2nd and April 30th of each year.If April 30th
falls on a weekend, the deadline is extended to the following business day.
These boards meet annually in May to consider the protests. Petition forms to
the board of review are available at the local assessor’s office and from our
web site at
www.assess.co.polk.ia.us - Protest Information
If you would like to know what your current value on your home is let us know we can help.
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