The purpose of a property tax is to fairly distribute the necessary tax burden among all property owners based upon the market value of their property. Properties are appraised so that some of the costs associated with providing services, such as public education, fire and police protection, roads and utilities, can be allocated to property owners in proportion to the market value of their individual properties.
What Is A Reassessment?
The PVA Office is required by law to conduct an annual reassessment of all real estate in the county. Reassessment does not necessarily result in increased assessments for all properties. The assessment is a estimation of the sale price a property would bring if sold during the time period in which the assessment was made. All residential neighborhoods do not appreciate or depreciate at the same rate. Commercial properties differ, as well, in how the market reacts to changing trends. Generally, in a given fiscal year reassessment, there will be assessments that rise, fall or stay the same based on internal and external factors that influence property values. Reassessment is simply the process by which the assessed value of each property is updated to keep that value consistent with what the property is worth on the open market.
How Is Property Assessed?
There are three accepted methods for valuing real estate:
The Sales Comparison Approach:
To find the value of any property, the PVA must first know the selling prices of similar properties. This method compares your property to others that have sold. When using the sales comparison approach, the PVA considers and analyzes all available market data to arrive at a fair valuation of your property. Size, quality, condition, amenities, location and time of sale are some of the important factors given consideration. The sales comparison approach generally produces the most reliable indication of the value of residential property.
The Cost Approach:
The cost approach estimates the current costs of material and labor needed to replace your home with one of similar quality and function. Depreciation is factored into the valuation of the improvements.
The cost approach is a good method for appraising special purpose and unique properties that are usually owner occupied, seldom sell for the use they were constructed for, and have a limited market base.
The Income Approach:
The income approach values the revenue producing capabilities of a property. This method reviews market data derived from commercial properties to determine income, expenses, vacancy rates and capitalization rates. A net operating income is capitalized into a value which includes the land. The income approach is widely used to assess commercial properties which generate income derived from tenant leases.
How Is The Amount Of Real Estate Tax Determined?
The PVA's primary responsibility is to estimate the fair market value of your property, so that you pay only your fair share of taxes. The amount you pay in real estate tax is determined by a tax rate applied to the assessed value of your property.
Real Estate Taxes = Assessment x Tax Rate
Who sets the property tax rates?
The State. The revenues generated from state tax go to the state general fund. The legislature establishes the state rate.
The County. County governments rely heavily on the property tax for revenues. The Fiscal Court establishes the county rate to generate funds to operate.
The School. Property taxes are a major source of revenue for local schools. The School Board establishes the school rate.
The Special Districts. Special taxing districts fund specific public services such as libraries, fire protection, health department, soil conservation and extension service. The particular board of each special taxing district establishes the rate.
The City. City governments also rely heavily on the property tax for revenues. The City Council establishes a rate to generate funds to operate.
When Are Taxes Due And To Whom Do I Pay Them?
The annual real estate tax is sent out by the Lee County Sheriff on October 1st. The bill is due by December 31st of each year. With many homeowners, real estate taxes are paid by their mortgage company from funds in the owner's escrow account. For those property owners that do not have a mortgage company, the tax payment would be sent to the Lee County Sheriff directly by them.
What Are Your Rights And Responsibilities?
If you have questions regarding your assessment, or if your opinion of the value of your property differs from the PVA's, our staff is available to provide you with answers about the appraisal process and your specific assessment.
You can help us with our goal of producing fair and equitable assessments by verifying that the information contained in the assessment record for your property is correct.