Chapter 1 Flashcards
Assessor responsible of all taxable property
Discover, List, and Valuation
Property tax meaning based on value
Ad Valorem Tax
Adequate mapping system, preferably a geographic information system (GIS)
Discovery
Creating an inventory of quantity, quality and important characteristics of all taxable property
Listing
Assessed value at its market value or some sort of legally authorized fractional assessment thereof also known as the taxable value
Valuation
The primary Revenue source for local government
Property tax
Calculate tax rate
Budget/assessed value
Calculate assessment ratio
Assessed value/market value
Calculate tax bill (property tax)
Subject property value times tax rate
Computing an effective tax rate
Assessment ratio times tax rate
When calculating an effective tax rate you can use
The triangle E A T
The right of any person to possess, use, enjoy and dispose of a thing
Property
Consist of interest, benefits and rights inherent in the ownership of land and anything permanently attached to the land or legally Defined as movable
Real property
Land and improvements permanently affixed thereto
Real estate
Property classes
Residential
Commercial
Industrial
Agriculture
Consist of movable items not permanently affixed to our part of the real estate
Personal property
Six basic rights associated with the ownership of property
Slugger
Sell, lease, use, give, enter, refuse
Governmental restrictions on property can be placed on bundle of rights
Pete
Taxation
Eminent domain
Police power
Escheat
Rights of co owners Condominium and subdivision Covenants Mortgages Easement Liens and judgements Leases
Private encumbrances
Ownership of all legal rights to property is known as
Fee simple (fee simple absolute)
A lease that conveys property rights from an owner (lessor) to a tenant (lesser)
Leasehold interest
Landlord interest
Leases fee interest
In order for property to have value it must have
(Used)
Utility
Scarcity
Desirability
Effective purchasing
Value of property for a specific use
Value in use
The amount an informed buyer would offer in exchange for a property under given market conditions
Value in exchange
Sacrifice made to acquire property
Cost
The amount asked, offered or paid for a property
Price
The monetary worth of property to buyers and sellers
Value
The most probable price which a property should bring in a Competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming price is not affected yet undue stimulus
Market value
Anticipation Balance Change Competition Conformity Consistent use Contribution Increase and decreasing returns Progression and regression Substitution Surplus productivity Supply and Demand
Principles of balance
Elements of demand
Demand = consumer
Elements of supply
Supply = producer
Estimate of value usually in writing of an adequately described property as of a given date
An appraisal
The type of value usually estimated by the assessor is
Market value
The ratio between the current tax bill and the property value
The effective tax rate
The use that generates the highest net return to a property over a reasonable time period is called its
Highest and best use
This principle States the maximum value of a Neighborhood is attained when the uses of land are perfectly complementary
The principle of balance
Which principle affirms that land cannot be valued on the basis of one use while improvements are valued on the basis of another
Consistent use
Four test that the appraiser must make in the analysis of the highest and best use
Legally permissible
Physically possible
Financially feasible
Most productive
Property that can be moved without causing damage or change to either the item of property or to the structure to which it was attached
Personal
Assessment level times the tax rate equals
Effective tax rate
The forces at which the forces of supply and forces of demand meet
Equilibrium
Two types of highest and best use analysis
As if vacant
As if improved
The typical life cycle of a neighborhood includes
Growth
Stability
Decline
Revitalization
Consumer tastes and preferences Consumer income Price is related commodities Consumer expectations Price of commodity
Elements in a market place
Amount of goods that producers are willing to sell at a given price during a specific time period
Supply
Appraisal process
Definition of the problem
Scope of work
Preliminary survey and planning
Data collection and analysis
Highest and best use
Application if the data and 3 approaches
Correlation/reconciliation
Basis for the adjustments in the sales comparison approach to value is the principle of
Contribution
Value is created by the expected future benefits to be derived from the property
Principle of anticipation
Determining the identity of the property to be appraised is a part of which step in the appraisal process
First
Three types of boundaries used to delineate neighborhoods are
Political
man made
Natural
Under the step in the appraisal process that is termed data collection and analysis, specific data include
Site data
Data and collection and analysis
General data
Neighborhood characteristics
Data collection and analysis
Specific data
Site
Off site
Improvement
Data collection and analysis
Comparative data
Cost
Sales
Income/expense
Steps in cost approach
Estimate land value as if vacant
Estimate the total cost new of improvements as of the appraisal date
Estimate the total amount of depreciation
Subtract the total amount if depreciation from the cost new of primary improvements
Estimate the total cost new of any accessory improvements and site improvements. Then estimate and deduct all depreciation from the total cost new of improvements
Add site value to the depreciated cost of improvements to arrive at an indicated value by the cost approach
Steps in the sales comparison approach
Data collection and verification
Analysis of market data to develop units of comparison and select attributes for adjustment
Development if reasonable adjustments
Application of adjustments to comparable sales
Analysis of adjusted sale prices to estimate value of subject
Steps in the income approach
Estimate potential gross income (pgi) from market data
Estimate vacancy and collection loss and then subtract it from potential gross income (pgi)
Add miscellaneous income to arrive at effective gross income (EGI)
Analyze and estimate operating expenses
Subtract operating expenses from effective gross income to arrive at net operating income (NOI)
Select an appropriate capitalization method, technique and rate
Compute value by capitalizing the net operating income
Four forces or factors of value
(Pegs) Physical Economic Governmental Social
A geographic area typically encompassing a group of sub areas that are influenced to a great extent baby the same economic factors
And economic area
Comprises complementary land uses in which all properties are similarly influenced by the four forces affecting value and is sub area of an economic area
Neighborhood
One of the steps an assessor must take in the discovery of property is to
Conduct periodic on site inspections of the property
In the appraisal process data collection requires the assessor to collect
General data
Specific data
Comparative data
What element of the marketplace is likely to contribute a change in supply?
Entrepreneur expectations
Stratification is the first step in analyzing land sales and the
Primary sort is by
Market area
The principle illustrating that market value is determined by such factors as zoning, rent controls, interest rates and so on is
Change
The _________unit would be the appropriate unit when pedestrian access is an important consideration
Front foot
When adjustments are being made to comparable sales, using the percentage adjustments in the direct sales comparison approach, the sequence of adjustments the appraiser must follow is
Financing, market conditions, location, physical characteristics
The land valuation method that replicates the actions of subdivides or developers is known as the
Anticipated use or development method
