Did you ever wonder what determines how much you pay in property taxes? How does the government decide how much your property is worth?
In this article, we’ll discuss what a tax valuation is, who conducts it, and what determines the value of a property. We’ll then discuss how you can receive help preparing for your valuation.
What is a Property Tax Valuation?
A property tax valuation is an assessment of the worth of your property, such as a home or building you own. In other words, how much is your house or property worth, or how much should it sell for on the market? This valuation then determines how much in taxes you pay on your property each year.
Who Conducts Property Tax Valuations?
Municipal Property Assessors conduct most tax valuations in the United States. Each tax district — usually a town or city — has its own assessors that are responsible for deciding how much each property that resides in their district is worth.
What Determines the Value of Your Property?
According to ValuePenguin, the value of your property is based on one of the following three things. Each state’s laws are slightly different regarding how a property should be appraised, but they all follow one of three criteria:
- Market Value: The market value of your property is what it would sell for on the free market, based on the natural forces of supply and demand. In other words, with no regulations, how much would the buyer be willing to pay and how much would the seller be willing to sell for? Most states require homes to be assessed according to their market value.
- Appraised Value: The appraised value of a property refers to how much the property assessor believes the property is worth. The assessor takes a close look at the property and then determines its value based on a number of factors. This method of valuation is subjective, as the assessed value will differ depending on the assessor. Because of this, most states do not use this method to value homes.
- Combination of Both: Some states use a combination of both market and appraised value to determine the value of a property. For details on how state laws may impact your unique situation, reach out to one of tax valuation experts here.
Get Professional Help Preparing for Your Tax Valuation
Because the amount you pay in property taxes could greatly impact your finances, we recommend getting professional help to prepare for your valuation as much as possible.
If you would like assistance with a tax valuation, please do not hesitate to reach out. With the full range of accounting services Allman & Allman APAC provides, we are equipped with the expertise for which you may be in need. Seeking guidance from our firm will provide you the opportunity to work with individuals armed with broad and deep financial knowledge, able to provide advice on a wide range of issues. As a full-service public accounting firm, our professional services will surely help you succeed and thrive. Please feel free to reach out to Allman & Allman APAC via email at Genna@apapd.com or via phone at 760-406-5056 to discuss your situation and find out how we can help you grow. We look forward to hearing from you.