Assessing 101

Understanding Your Property Assessment

Assessed Value (AV)

State law requires that all property be assessed uniformly at no more than 50% of its usual selling price, also called the True Cash Value (TCV). Each year, the Assessor determines the Assessed Value based on the property’s condition as of December 31 (Tax Day) of the previous year.

• If property values in your neighborhood increase, your Assessed Value will likely increase.

• If values decrease, your Assessed Value may decrease accordingly.

True Cash Value (TCV)

This is the assessor’s estimate of a property’s market worth or usual selling price. It may differ from the actual sale price because the assessor uses the same method to value sold and unsold properties. Therefore, the assessed or taxable value is not automatically half the sale price.

State Equalized Value (SEV)

The SEV is the Assessed Value after adjustments made through County and State Equalization processes. Often, the AV and SEV are the same. The County Board of Commissioners and State Tax Commission review assessments and adjust (or “equalize”) values by property class (e.g., Residential, Commercial) to ensure they meet the constitutional 50% level of assessment.

Taxable Value (TV)

The Taxable Value is the lesser of the State Equalized Value or the Capped Value (see below). Taxable Value is the number used to calculate your property taxes.

• If you purchased your property in the past year, the capped value limits do not apply.

Capped Value (CV)

The Capped Value limits how much your taxable value can increase each year, based on this formula:

Capped Value = (Prior Year’s Taxable Value − Losses) × (1 + CPI) + Additions

• CPI = Consumer Price Index or 5%, whichever is less

• Additions = Examples include new construction

• Losses = Examples include demolished structures like a garage

Transfer of Ownership

When a property changes ownership, the taxable value for the next year resets to the State Equalized Value. After that, the taxable value is again subject to the capped value limits.

• Note: The assessed value is based on market value, not necessarily the purchase price.

State Equalized Value (SEV) vs. Taxable Value (TV)

• The SEV reflects current market conditions and moves up or down with the real estate market.

• The Taxable Value is capped to limit increases, so it may lag behind SEV increases or decreases. Eventually, in a declining market, both SEV and TV decrease.

Principal Residence Exemption (PRE)

The PRE exempts homeowners from paying about 18 mills of school tax if the home is their principal residence.

• To qualify, you must own and occupy your home by June 1 to receive the exemption for that year.

• If you qualify by November 1, the exemption applies starting with your winter tax bill (if applicable).

• The exemption continues until you sell or move.

• Forms are required to apply for or remove this exemption.

Property Taxes

Property taxes are calculated by multiplying the millage rate divided by 1,000 by your taxable value.

• Since 1994, the capped value has helped limit sudden increases in taxable value during rising markets.

• Before that, taxes were based on the State Equalized Value.

Foreclosures

Sales involving foreclosures or transfers to relocation companies are excluded from the Assessor’s market value studies because they are not considered typical sales.

Notice of Assessment

Each February, you will receive a notice showing:

• Your current Assessed Value, Taxable Value, and Property Class

• Any applicable exemptions (like PRE or agricultural)

• Whether there was a recent transfer of ownership

• Dates and times for the March Board of Review meetings

If you disagree with your assessment, please contact the Assessor’s Office or follow the instructions to appeal to the Board of Review.

Example: Calculating SEV and TV

Assume a house and property valued at $210,000 for 2023 with only market adjustments unless stated otherwise.

Scenario 1: No New Construction or Losses

2025 Capped Value:

2024 TV × (1+CPI) → 102,966 × 1.031 = 106,158

• Since 2025 Capped Value ($106,158) ≤ 2025 SEV ($110,000), 2025 TV = $106,158

Scenario 2: With $20,000 New Construction (Additions) in 2024

2025 SEV:

2024 SEV + NEW → 110,000 + 10,000 = 120,000

2025 Capped Value:

2024 TV × (1+CPI) + ADDITIONS → 102,966 × 1.031 + 10,000 = 116,158

• Since 2025 Capped Value ($116,358) < 2025 SEV ($120,000), 2025 TV = $116,158