Transcript ASSOCIATED APPRAISAL - Village of Waunakee, WI

Village of Waunakee
2012 Revaluation
Educational Information
Session
Presented by
Associated Appraisal Consultants, Inc.
Dean Peters
Revaluations &
the Assessment Process
• Assessments are done annually at market
value or a percentage of market value
• Assessments must be equitable
• Values must be based on January 1st each
year
• Assessments may be contested or appealed
each year during the Open Book & Board of
Review
Four Types of Annual Assessment
1.
2.
3.
4.
Annual Review / Maintenance
Interim Market Update
Exterior Revaluation
Full Revaluation
Annual Review / Maintenance
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Annexed Properties & New Subdivisions
Changes in Exemption Status
Demolitions, Fire Damage, Water Damage
New Construction
Change in Class, Legal Description, Zoning
Reassessment of all Business Personal
Property
Interim Market Update
• Reliable Records
• Revaluation with in last 5 years
• Includes all requirements of Annual
Review/ Maintenance PLUS Analysis of
sales ratios and adjustments to assessments
in all neighborhoods or property types
where assessment equity is insufficient
Exterior Revaluation
• Reasonably reliable assessment records
• Full revaluation with in last 6 – 9 years
• Includes all requirements of Annual
Review/ Maintenance PLUS exterior
inspection of all properties and
reassessment of all properties at full value
Full Revaluation
• Appropriate when:
– Assessment records are outdated or incomplete
– or, assessment uniformity is inadequate
– or, a full revaluation has not been completed within the
past 10 years
• May be required by state statute and enforced by
the Wisconsin Department of Revenue
Full Revaluation Requirements
• Includes all requirements of Annual
Review/ Maintenance, PLUS
• Physical inspection of all buildings and
vacant parcels of land
• Interior inspection of all primary buildings
• New photos & measurements of all
buildings
• Reassessment of all properties at full value
Customer Service
• A live person always answers the phone.
• Our office staff handles all inquiries from:
taxpayers, realtors, and appraisers.
• We handle all appointments for Open
Book.
• We have a toll free phone number for use
during normal business hours.
• No frustrating menu systems.
2012 Revaluation Process
• Informational letters to be mailed to all property
owners
• Field work and property inspections conducted
• Analysis of sales and calculation of new assessed
values based on local market conditions
• Property owners notified by mail of new assessed
values
• Appeal process (Open Book & Board of Review)
How to Identify our Staff
• Assessors wearing photo ID tags &
company clothing
• Red fleet vehicles displaying
Associated Appraisal logo & name
• Assessors carry letter of introduction
on Village of Waunakee letterhead
• Tag left at door if no one is home
Photo ID Tag
Red fleet vehicles
Your Partner in Municipal Mass
Assessment
Staff
• Project Managers are Assessor Level 2 or
Level 3 certified.
• Property Listers are certified Assessor Level
1 or Technician.
• Project Technicians are all Department of
Revenue certified.
• Personal Property Staff members are
Department of Revenue Certified.
Property Inspection Process
• Property Owner Home
– If okay, assessor will complete the walk
through at that time
• Property Owner Not Available or Not Home
– Tag left with toll free phone number
– Schedule specific appointment time
• Evening appointments available
• Interior walk-through of homes typically takes
10 minutes or less
• Most measurements taken from the exterior
Interior Walk Through
• Assessor must consider all factors that affect
market value
– Square footage, room count, quality, condition,
etc.
• Assessors have no interest in personal belongings
or housekeeping
• Assessors will be courteous and professional
• Refusal of inspection results in loss of appeal
rights per Wisconsin Statutes 70.47(7)(aa)
Notice of Changed Assessment
• Mailed for all properties when all field work
and market analysis is complete
• Mailed at least 15 days before the Open
Book.
• Board of Review will hear all final
objections to assessed value
Open Book
• New assessment roll is available for public
viewing
• Property owners may meet with assessor to
discuss revised assessment
• Adjustments to assessments may be made at
this time if warranted
• Open Book is an informal process
Board of Review
• Formal hearing ideally reserved for situations
when assessor and property owner cannot agree
• Testimony is given orally, under oath, by property
owner and assessor
• Property owner must provide opinion of value and
factual evidence
• Assessor is presumed correct
• Decision will be made by majority vote
• Clerk must be notified of intent to object at least
48 hours before the beginning of BOR
Assessed Value
• In a revaluation, assessed values should
represent the market value of property as of
January 1st
• Assessed values must be calculated using
professionally accepted appraisal practices
and the best information the assessor can
practicably obtain
Appraisal Methods
• Three universal approaches to real estate
appraisal & valuation:
1. Sales Comparison Approach
2. Cost Approach
3. Income Approach
Sales Comparison Approach
• Uses recent sales of comparable properties
to interpret market value of a subject
property that has not recently sold
• Comparable properties are those with
similar attributes, in the same market area,
that would likely be considered by potential
buyers of the subject property in a
competitive market
Sales Comparison Adjustments
• In the Sales Comparison Approach, sale
prices of comparable properties are adjusted
for differences between the sale property
and the subject property
• Adjustments are made for GLA, bed/bath
count, garage stalls, lot size, quality, age,
condition, lot size, story height, etc.
Sales Comparison Adjustments
• When sale comparables are superior to the
subject, the sale price of the comparable
property is adjusted down
• When sale comparables are inferior to the
subject, the sale price of the comparable
property is adjusted upward
• Goal is to estimate value of subject based
on sale prices of comparable properties
Cost Approach
• In the Cost Approach, market value is
estimated by taking the replacement cost of
the buildings & improvements, minus
depreciation, and adding in the value of the
land
• Cost Approach is based on the principle of
substitution, which states that a buyer will
not pay more for a property than what it
would cost to acquire an acceptable
substitute with like utility
Usefulness of Cost Approach
• Less reliable than Sales Comparison
Approach, especially for appraisal of older
homes with heavier depreciation
• Must be used when there is a lack of recent
comparable sales
• Often used for unique properties and
commercial properties
Income Approach
• In the income approach, market value of
investment property is estimated by
converting expected future benefits of
property ownership into an expression of
present value, using income capitalization
• Capitalization rates and gross rent
multipliers are derived from sales of rental
property and leased commercial property
Income Approach Example
• Direct Capitalization Method
• Example: Rental property with $45,000
gross annual income, $10,000 expenses, in a
market with cap rate of 11.5%
– Net Operating Income/Cap Rate = Value
– $35,000/ .115 = $304,000 market value
Assessed Value Summary
• Assessments will be made using
professionally acceptable appraisal practices
according to state law and the Wisconsin
Property Assessment Manual
• Revaluations are a form of Mass Appraisal,
in which a comprehensive & precise
valuation model is created based on a body
of sales data and in-depth analysis
Assessed Value Summary
• The goal of the Revaluation is to appraise
and assess all property in a fair and
equitable manner at market value.
• Market Value is the highest price that a
property is likely to bring in a competitive
market between a knowledgeable and
willing buyer and seller.
Property Taxes
• Property taxes
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–
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State
County
Municipality
School district & vocational/ technical college
• Tax levy amounts are based on annual budgets
• State, county & school tax levies are apportioned
according to equalized values
• After apportionment of tax levies, the tax burden
for each municipality is divided up according to
individual assessed values
Equalized Values
• Determined annually by the Department of
Revenue for each municipality in Wisconsin
• Should represent the total taxable value of
each municipality at 100% full value
• Published annually on August 15th
• Adjusted annually for changes in market
conditions, new construction, & other
factors unique to each municipality
Purpose of Equalized Value
• Apportionment of tax levies to overlying
taxing jurisdictions such as counties &
school districts.
• Example: Dane County
- Comprised of 61 individual municipalities
- Would it be fair to collect 1/61 of County tax from each
municipality?
- No. Amount paid by each municipality is determined by
its percentage of the county’s equalized value
Purpose of Assessed Value
• Divides each municipality’s total tax burden
among individual taxable properties
• Must be uniform in order to accomplish a
fair distribution of tax burden
• Should be as close as possible to market
value (10% variance is tolerated by statute)
• Assessed values do not affect the total
amount of property taxes collected
Taxes in a Revaluation Year
• Revaluations will affect each property’s
percentage share in the municipality’s total
tax burden
• Revaluations will have no effect on the total
amount of property taxes collected
• The goal of a revaluation is equitable
distribution of taxes according to market
value of each property on January 1st
Example: Dinkyville
Property Assessments before Revaluation
A
$350,000
B
$250,000
C
$250,000
D
$150,000
Total Assessed Value = $1,000,000
Dinkyville’s Distribution of Taxes
before Revaluation
• Total assessed value is $1,000,000. This is
also called the “Tax Base”
• Total property tax burden is $25,000
• How is the Mill Rate determined?
– Tax Levy/Tax Base
– $25,000/$1,000,000 = .025000 or 2.5%
Dinkyville Property Taxes
A
350,000 x .025
$8,750
B
250,000 x .025
$6,250
C
250,000 x .025
$6,250
D
150,000 x .025
$3,750
Assessed Value * Mill Rate = Taxes Due
Assessed Value
After the
Revaluation
Assessed Value
Before the
Revaluation
A
$300,000
-14%
B
$225,000
-10%
A
$350,000
B
$250,000
C
$225,000
-10%
D
$150,000
No change
C
$250,000
D
$150,000
Total Assessed Value Now = $900,000
Will Dinkyville Property Taxes
be Affected by Revaluation?
• Overall assessed value decreased by 10%
• Total tax burden remains constant at
$25,000
• Therefore, the Mill Rate must increase
– Tax Levy/Tax Base = mill rate
– $25,000/$900,000 = .027778 or 2.8%
• Taxes are redistributed based on new
assessed values and new mill rate
After the
Revaluation
A
300,000
$8,250
- $500
C
225,000
$6,250
No Change
B
225,000
$6,250
No Change
D
150,000
$4,250
+ $500
Before the
Revaluation
A
350,000
$8,750
B
250,000
$6,250
C
225,000
$6,250
D
150,000
$3,750
No change in total taxes collected
Conclusion
Accurate, fair & equitable assessment of all
properties will result in fair and equitable
distribution of property taxes in Waunakee
Questions
Associated Appraisal Consultants, Inc.
1-800-721-4157