A Guide Tax Assessment. George M. Durgin Middletown Tax Assessor August 4, 2016

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1 A Guide Tax Assessment George M. Durgin Middletown Tax Assessor August 4, 2016

2 A Guide to Tax Assessment Legal Basis Valuation Land Value Building Value Appeal Process

3 Legal Basis Rhode Island General Laws (RIGL) TITLE 44 -Taxation CHAPTER Levy and Assessment of Local Taxes Date of assessment of valuations. December 31 in each year at 12:00 A.M. midnight, the date being known as the date of assessment of city or town valuations.

4 Legal Basis (continued) Assessment of valuations Apportionment of levies Each city and town shall conduct a full revaluation every nine (9) years And an update of real property every three (3) years from the last revaluation Assessment at full and fair cash value. (a) All real property subject to taxation shall be assessed at its full and fair cash value

5 Legal Basis (continued) Notice of assessors' meetings Notice by taxpayer of intent to bring in account. The notices require every person and body corporate liable to taxation to bring in to the assessors at the time they may prescribe a true and exact account of all the ratable estate owned or possessed by that person or body, describing and specifying the value of every parcel of the real estate as of December 31 in the year of the last update or revaluation. Must be submitted by January 31 of each year May request an extension to March 15. This request must be submitted by January 31.

6 VALUATION Mass Appraisal The Uniform Standards of Professional Appraisal Practice (USPAP) provides mass appraisal as its own specialty through its STANDARD 6. It defines mass appraisal as the process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing. Mass Appraisal is different than a single property appraisal

7 VALUATION (con t) Property Records (also known as the field cards) Tax Assessor office copy Most complete record Available in person only for $.30 On-line at Does not have the level of detail that the Tax Assessor office copy has It is updated periodically by VGSI where Tax Assessor office copy is current

8 Page 1 of a sample field card

9 Page 2 of a sample field card

10 VALUATION con t Two components of assessment value Land Improvements Values are established for each component Values are generated from tables that are created and maintained by the reval company Values begin with entries into the system that are based on the appraiser s judgement

11 LAND VALUATION Land Value Neighborhood Code The town is divided into neighborhoods which are clusters of properties that have similar characteristics and values This is the first entry into the system. It is found on page 1 of the field card. There are 25 residential neighborhood codes in Middletown

12 LAND VALUATION (continued) VGSI establishes a base value for an average neighborhood in town. The multiplier for this neighborhood is 1.0 The average neighborhood in town is coded 0060 The base value of a 12,000 sf parcel is $13.87 p/sf Value = $13.87 p/sf x 12,000 sf = $166,440 rounded to $166,400 Adjustments are automatically generated for size and zoning Based on how a neighborhood compares to the average neighborhood, the multiplier is adjusted Example Neighborhood Code = 0065 Multiplier = 1.1 Value = $13.87 p/sf x 12,000 sf x 1.1 = $183,084 rounded to $183,100

13 LAND VALUATION (continued) These values are further adjusted to reflect the value of a specific neighborhood or property Other adjustments include the site index/influence factor and condition factor. These adjustments are based on the judgement of the appraiser

14 LAND VALUATION (continued) Site Index/Influence Factor A percentage adjustment that reflects a qualified street rating it is reflected in the Influence Factor. The relationship between the Site Index and the Influence Factor is fixed A Site Index of 5 indicates the street rating is neutral and the influence factor is 1. If the Site Index is changed to 2 then the Influence Factor changes to.6

15 LAND VALUATION (continued) Condition Factor An adjustment factor used to reflect the condition of land in a parcel Location, rocky, swampy, rolling, etc. This factor is entered directly into the field whereas the Influence Factor is tied to the Site Index In the example the C factor is 1

16 LAND VALUATION (continued) Sample analysis Neighborhood Code = 0080 Multiplier = 1.15 Site Size = 12,000 sf Base Value p/sf = $13.87 Site index = 7 Multiplier = 2 C-factor = 1.25 Site Value Calculation = 12,000 sf x $13.87p/sf x 1.15 x 2 x 1.25 Value = $478,515 rounded to $478,500

17 BUILDING VALUATION Values are generated from tables that are created and maintained by the reval company Data is on Page 2 of the field card Begin by identifying the type of building (Residential, commercial, industrial, etc.) Enter style (cape, colonial, raised ranch, etc.) Enter factual data (no. BR, no. BA, heating system, etc.) Enter construction grade (perceived quality)

18 BUILDING VALUATION (continued) Sketch automatically calculates building area We use effective building area (Eff Area) In the example the effective building area is 2,279 sf

19 BUILDING VALUATION (continued) Depreciation Physical ordinary wear and tear Calculated based on the Actual Age of the improvements and the quality of the improvements Tied to depreciation tables Functional loss in value due to factors within the building Eg. 5 bedrooms and one bathroom Subjective adjustment External loss in value due to factors outside of the building Eg. 1950s ranch on Indian Avenue Subjective adjustment

20 BUILDING VALUATION (continued)

21 BUILDING VALUATION (continued) Other contributors to value Extra Features components that are not typically found in a dwelling Fireplace Hot tub Elevator Outbuilding Shed/barn Detached garage Swimming pool

22 APPEAL PROCESS Appeal period begins September 10 and closes December 10 Forms will be available in the Assessor s office and on line during the appeal period. Forms will not be accepted prior to September 10 The Assessor has 45 days to render a decision

23 APPEAL PROCESS If no decision is rendered or if the tax payer is not satisfied with the Assessor s decision then the tax payer may appeal to the Assessment Board of Review. Request for a hearing must be made in writing and delivered to the Assessor s office: 30 days after the date of the Assessor s decision; In the event that no decision was issued then not more than 90 days after the expiration of the initial 45 day period.