Real Property
Property Value Briefing
"Our plan is to achieve a better understanding with the public and
with local and state decision-makers on just what's happening with
property values, appraisals and taxes in Davis County."
- James B. Ivie, County Assessor
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Statutory Responsibilities
Article XIII of Utah Constitution
"Taxed at a uniform and equal rate in proportion to its value"
Utah Code Sec. 59-2-303.1
Requires annual update of values based on
current market data.
Requires detailed review of each property's characteristics once every
five years.
Utah Code Sec.59-2-704
Requires that all counties be uniform and at market value to ensure
fairness throughout each of the counties.
Utah State Tax Commission requires a Sales Ratio Study.
Utah State Tax Commission requires factoring or other corrective action
when necessary.
Uniform School Fund.
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How Property is Appraised
1. Physical Characteristics
All physical characteristics for all properties are collected and entered
into computer.
2. Current Sales Collected Throughout Entire County
All sales visited by staff and verified through:
a. Buyer, Seller or Agents to the transaction.
b. Interior inspections when possible.
c. Exterior measurements of sales are verified.
d. Using only arms-length transactions.
e. If none of the above, County considers it an unverified sale and it is
not used.
3. Uniform Classification
All property (both sold and non-sold) are classified similarly by:
Type, Condition, Style, etc.
4. Neighborhood Classification
County is divided into homogeneous neighborhoods.
5. Sales Analyzed with Values Generated
For different property characteristics and then applied to both sold and
non-sold properties alike.
QUALIFIED PERSONNEL IN THE ASSESSOR's OFFICE are responsible for Motor
Vehicle, Personal Property valuation, and Real Property valuation.
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Quality Systems
GIS- Geographic Information System allows a
clear picture of sales information and current market values throughout
the county.
SIGMA SYSTEMS - Leading edge of software
technology. Allows us to re-appraise each area as completed.
A complete in-house system for Assessors.
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Paired Sales Analysis
Appraisers in general use a Paired Sales Analysis in the appraisal
process. Below is an example of a Paired Sales:
HOME "A"
1,000 Sq. Ft.
2 Car Garage
Full-Finished Basement
2 Bedroom 2 Bath
1 Fireplace
SALES PRICE $100,000
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HOME "B"
1,000 Sq. Ft.
2 Car Garage
Full-Finished Basement
2 Bedroom 2 Bath
No Fireplace
SALES PRICE $98,500
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* Price difference of $1,500 - attributable to the only difference, which
is a fireplace.
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Multiple Regression Analysis
Davis County uses MULTIPLE REGRESSION ANALYSIS which is similar to the
"Paired Sales Analysis," but more complex, and offers a cost effective
way to value the entire county. The complexity of appraising over
82,000 parcels require a much more complex analysis than "Paired Sales
Analysis". Multiple Regression Analysis allows us to analyze
thousands of sales instead of just two and to analyze over 75 different
criteria such as size, basement, baths, quality, type of exterior, type
of roof, condition, neighborhood, etc.
The result of this analysis is an unbiased and uniform appraisal
process.
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Tax Rate Calculation
Approved Budget ÷ Total Tax Base = Tax Rate
TOTAL TAX BASE*
INCLUDES THE FOLLOWING:
- Locally assessed Residential Property
- Locally assessed Commercial Property
- Locally assessed Personal Property
- Personal Property of Businesses
- Sometimes Fee in Lieu (Motor Vehicle)
- State Assessed (by Tax Commission)
- One-quarter Percent Sales Tax (exchanged for Property Tax)
* Each Taxing District has a distinct tax base.
For Example: The tax base for the County includes the entire county while
the tax base for Farmington includes only Farmington.
WHAT MAKES MY TAXES CHANGE?
- Changes to existing property; additions to homes, such as garages,
finished basements, etc., or loss of property through demolition.
- Additional taxes are voted on by the general public, such as bond issues.
(e.g. Davis School District Bond Elections)
- Changes in the budgets of the taxing district.
- Changes in the statutes or laws.
- Property values rise or fall.
- The rate of increase/decrease among classes of property or geographic locations is different.
- Change in philosophy - Wiltel / Discover Card and Legislative change.
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Tax Shifting Information
The tax burden of a taxing entity may be shifted from one class of
properties to another when the value of one or more large groups -- or
classes -- of properties changes dramatically. One example would be
Uintah County, whose tax base is dominated by centrally assessed oil and
gas properties. When oil prices declined several years ago, the
assessed value of those properties declined as well. In order to
raise the same amount of revenues as the previous year, taxing entities
had to raise their rates on all properties (residential, locally assessed
commercial and other state-assessed properties) to recoup the tax dollars
lost in that decline of values.
Tax-shifting is most noticeable when one large taxpayer, such as the
Intermountain Power Project, has a change in value. When the IPP was
built, the burden of financing local governments was largely shifted from
local homeowners and businesses to the immense power plant. But if
there is a downward fluctuation in the plant's assessed value -- through
an appeal, for instance -- then the tax rates in the various taxing
districts may be increased to generate that lost revenue.
Tax-shifting can also occur when residential property values escalate as
they have been in this market, while the value of other classes of
property (such as commercial and centrally assessed) remain fairly
flat. When residential values shoot up -- and assessed values
follow -- in order to bring in the same amount of money, taxing entities
are required to bring rates down. However, those residential
properties still will see a tax increase. Because residential
property only represents a portion of a taxing entity's total tax base, it
is not possible to bring rates down low enough to make residential taxes a
"wash", without the taxing entity losing overall revenue, compared to the
previous year. Another situation that can create a tax shift is when
one area is reappraised and the other areas of the county are not.
Generally, government has an overall cost of doing business and certain
levels of service must be maintained, particularly in the schools.
So, when values plummet, rates generally rise. Again, the Truth in
Taxation Law is revenue-driven, not rate-driven. So, in this case,
if County A's property values declined 30 percent, the county could raise
rates to recoup the same amount of revenue, but would not have to advertise
a truth in taxation hearing. Even though rates would be increasing
substantially (and property tax bills with them), under the truth in
taxation definition that does not constitute a "tax increase".
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In Conclusion
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Property values are "fair and equitable" throughout the county for
all types of property for all areas of the county.
- Property values have generally increased over the past few years.
- Residential exemption increased in 1995 from 32% to 45%.
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Property tax in State uniform school fund tax decreased in 1995.
- Your tax bill will go up or down depending on:
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The value changes of your property in relation to the rate
of increase/decrease of other properties in your taxing
district (shift)
- Tax increases voted by the taxing entity
- Voted bond increases
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Major appeals resulting in refunds (usually centrally
assessed) also called a judgement levy
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If you don't agree with your value, please come see us
and/or file an appeal.
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