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15 | Page <br />PROPERTY OWNER MISCONCEPTIONS <br />The notion that a change to the assessed value of a property changes the property taxes at the <br />same percentage is one of the biggest misconceptions in property taxation. There are many <br />parts that make up the taxation process that can have as much, if not more, bearing on property <br />tax calculations. Assessors determine the total true and full value of a property using standards <br />and practices set forth by the state. This is the foundation of the property tax system. <br />Assessment officials strive to set fair and equitable values for property owners. If true and full <br />values are fair and equitable, then everyone should be paying their fair and equitable share of <br />the property tax. Taxing entities such as county, city, park, and school boards decide how much <br />money their budgets need to operate for the up-coming year. That is how the actual tax dollar <br />is decided. For example: the combined budget for all taxing entities is $1,000,000 and the <br />assessor has determined that the total valuation of all taxable property is $100,000,000. A tax <br />rate is calculated by dividing the amount of needed tax collections by the total valuations. <br />1,000,000 / 100,000,000 = 1 percent tax rate. On a $100,000 valuation the taxes would equate to <br />be $1,000. If the assessor doubles all property valuations and the budget amount remains the <br />same, the tax rate is reduced, but the tax amount stays the same. 1,000,000 / 200,000.000 = 0.5 <br />percent tax rate. On a now $200,000 valuation, the taxes would still equal out to $1,000. The <br />property valuation doubled but the taxes remained the same. If the property value increases <br />but the taxing authority maintains the current tax rate, the taxes will rise. The jurisdictions can <br />receive more money without changing the tax rate because the value increased. $200,000 X .01 <br />= $2,000. Likewise, if the assessor lowered all valuations by 25% and the budget amount <br />remained the same, the tax rate would increase, and the tax amount would remain the same <br />even though the valuation decreased. $1,000,000 budget / 75,000,000 = .0134 tax rate. A previous <br />value of $100,000 lowered to $75,000 would still pay $1,000 in taxes. $75,000 X .0134 = $1,000. <br />WHAT IF THE VALUATION IS INCORRECT? <br />If a property owner believes the true and full value of their property is incorrect, they should <br />contact the assessor’s office for a review. The property owner should ask: <br />1.How the assessor values property. <br />2.How to gather information about their property and comparable properties. <br />3.How the appeal process works and what the deadlines are. <br />It is the property owner’s responsibility to furnish good information about their property to the <br />assessor. An appraisal of your property is only as good as the known information. A property <br />owner would not want to seek a mortgage on the property without a private appraiser knowing <br />all there is regarding the property. Likewise, a property owner can’t expect an assessor to fairly <br />assess their property without knowing all there is regarding the property.