Real Property

Valuation of Real Property

What is real property? Real property is defined by the Utah State Tax Commission as The interests, benefits, and rights inherent in the ownership of real estate.

How does the Assessor’s Office determine the value of real property? The initial phase is a site visit when a new structure is being built, or a change has been made to the existing building. When a change is made to an existing structure, a site visit is performed to update the county record with the new information. This information is gathered to ensure that the county records are as accurate as possible. The valuation stage comes after the initial collection segment.

Sales Comparison

The Sales Comparison approach is the most common approach to valuing residential properties. In this approach, the appraiser compares the property being appraised to similar properties that have recently sold. Similarities and differences must be noted in detail such as: date of sale, location of property, physical characteristics, and conditions of the sale.


Before an appraiser can use home sales as comparables, the sale must be verified. The sales are analyzed to determine if they are "arm’s length" transactions. An arm’s length transaction is defined as “a transaction between unrelated parties under no duress. There are multiple reasons for a home to sell under duress. These reasons include, but are not limited to: foreclosure, short sales, estate sales, job transfer, divorce, etc. Because duress sales typically don’t sell for market value, these sales are removed from the analysis.

The appraiser makes adjustments to the sale prices of the comparable properties for different variables such as location, size, quality, condition, amenities, etc. Appraisers generally use a Paired Sales Analysis to determine market differences for different features. 

Below is an example of a Paired Sale

Home "A"Home "B"
1,000 Sq. Ft.1,000 Sq. Ft.
2 Car Garage2 Car Garage
Full-Finished BasementFull-Finished Basement
2 Bedroom 2 Bathroom2 Bedroom 2 Bathroom
1 FireplaceNo Fireplace
Sold 1/10/2010Sold 1/12/2010
Sold Price $100,000Sold Price $98,500

There is a $1,500 difference in sales price. The only difference between the two homes is that Home "B" does not have a fireplace. The $1,500 shows that, all things the same, a buyer is willing to pay $1,500 more for a fireplace.

Income Approach

The Income Approach is the most often used approach in the appraisal of commercial or industrial properties, or properties which are bought and sold by investors primarily because of their income producing potential. This approach to value depends on reliable and detailed information on the income and costs of doing business for a particular business or enterprise.


This is referred to as the "income stream" of the property. The income approach defines value as "the present worth of future benefits of owning a property." These are composed of the annual income for an estimated number of years (called the economic life of the property) plus a capital amount representing land value or land value plus some remaining worth of the improvements. This approach emphasizes investment components rather than physical components of a property.

The steps in the income approach are:

  1. Estimate potential gross income (PGI)
  2. Add miscellaneous income
  3. Deduct vacancy and collection losses to derive effective gross income (EGI)
  4. Deduct operating expenses to derive net operating income (NOI)
  5. Select appropriate capitalization rate and method
  6. Develop an estimated value

Here is an example of the Income Approach: 


  1. Potential Rental Income (Small Office Condo)
  2. Add: Misc Income (if any, coin operated vending machine, parking, etc)
  3. Less: Vacancy/Collection loss

Amount Description
$19,200.00 $800/month * 12 months * 2 units
$0.00 No Misc Income
$960.00 5% in Vacancy Losses
$18,240.00 Effective Gross Income

Expenses (Based on Effective Gross Income)

  1. Fixed (does not vary with use)
  2. Variable (vary with use)
  3. Others

Amount Description
$800.00 Insurance
$2,000.00 Taxes
$960.00 Management Fee (5%)
$220.00 Painting
$100.00 Exterminating
$600.00 Repair/Maintenance
$1,880.00 Total Variable Expenses
$680.00 Other Expenses: Replace Reserves
$5,360.00 Total Expenses

Net Operating Income = Effective Gross Income - Total Operating Expenses 
Example: $12, 880 = $18,240 - $5,360


Value = Net Operating Income / Capitalization Rate 
Example:$135,579.00 = $12,880 / 9.5 % 

In this example the Small Office Condo is worth $135,579.00

Cost Approach

The Cost Approach is based upon the proposition that an informed buyer would not pay more than the cost of producing a substitute property with equal utility as the subject property. The Cost Approach works best for new residences, specialty buildings, large commercial units, and when little market data is available.

The steps in performing the Cost Approach are:

  1. Estimate the land value, as if vacant
  2. Estimate the replacement cost new of the improvements
  3. Estimate cash amount of accrued depreciation due to loss in value, physical deterioration, and/or obsolescence
    1. Physical – Deterioration due to weathering, wear, tear, etc.
    2. Functional – Depreciation resulting from deficiencies or super adequacies in the structure
    3. Economic (external) – Obsolescence due to factors outside of the subject property (being next to the dump or train tracks)
  4. Deduct the accrued depreciation
  5. Estimate the present depreciated value of any other improvements
  6. Add estimate of land value to the depreciated value of improvements to get the value of the subject property.

Sample use of Cost Approach:

  1. Land value, as if vacant: $50,000
  2. Replacement Cost New (RCN): $180,000
  3. Physical deterioration: $35,000
  4. Functional obsolescence: $15,000
  5. Economic obsolescence: $5,000
The total accrued depreciation is $55,000 ($35,000+$15,000+$5,000) 

The depreciated value of improvements is $125,000 ($180,000-$55,000) 

Value indicated by the Cost Approach: $175,000 ($125,000+$50,000) 

In this example, our house is worth $170,000.

Click on the links below to read the current and prior years annual reports.

In this annual report you will see changes in values by cities and property types, sales trends, new construction trends, information about appeals and much more.

Reappraisal involves a detailed review of property characteristics of at least one fifth of the county’s property inventory each year (Five Year Review of Property Characteristics Plan). Reappraisal looks at all physical components of properties to ensure all characteristics are correct. Reappraisal is identified with physical inspections or updated aerial photographs when possible.

Physical Inspections

Remodeling, expansion, and renovation projects are sometimes completed without building permits. Various other changes can occur to land and improvements which the Assessor’s Office may not detect without an on-site inspection of the property. Utah State law requires a detailed review of property characteristics for each property at least once every five years. (59-2-303.1)

Aerial Photographs

Regular updates of aerial photographs provide an excellent means for reappraisal collection. Discovery of new, or modifications to, structures and developments are readily detected when the new photographs are compared to the old. In addition, aerial photographs may make it possible to inspect areas of the county that are otherwise inaccessible.

In order to ensure that the Davis County Assessor’s Office has the correct information, a review of physical characteristics occurs every five years. 

What is the Assessor’s Office role in the Board of Equalization?

The Davis County Assessor’s Office reviews valuation appeals that have been accepted through the Board of Equalization. An appraiser in our office reviews the pertinent market information, performs an analysis, and then estimates the market value and, if warranted, recommends a value change to the Board of Equalization. Pertinent market data includes information submitted by the appellant, as well as other information available through data sources such as the Multiple Listing Service (MLS). The Assessor’s Office also represents Davis County in Board of Equalization hearings at both the county and state level.

People often ask, “What does it take to successfully appeal the market value of my property?” Here are some tips to navigate through the appeal process.

Keys to a Successful Valuation Appeal

Davis County works hard to ensure that the assessed value of all properties accurately reflects a fair market value. Despite our best efforts, sometimes there is an error in the valuation or in our records. With almost 100,000 parcels in the county we rely on property owners to help bring errors to our attention through the appeal process.

Frequently Asked Topics

Residential properties that serve as the property owner’s or a tenant’s primary residence for a minimum of 183 days per calendar year receive an exemption of 45% of fair market value. As a result, the primary residence is only assessed and taxed based on the remaining 55% of its fair market value. The Assessor shall grant the exemption to the first acre of land. If a qualifying property is not currently receiving the exemption, the owner will need to make application with the County Assessor.

Lisa M. Manning
Chief Deputy Assessor
Office: 801-451-3252
Fax: 801-451-3134
The residential exemption is limited to one primary residence per household. “Household” means the association of persons who live in the same dwelling, sharing its furnishings, facilities, accommodations and expenses; and “household” includes married individuals, who are not legally separated, that have established domiciles at separate locations. To qualify, a property does not need to be owner-occupied. Apartments and other rental housing used as a primary residence qualify for the exemption. An owner of multiple properties may receive the primary residential exemption on all properties for which the property is the primary residence of the tenant.

Criteria for Determining Primary Residential Status

  • Length of continuous residency in the place claimed as primary (owner-occupied) or a long-term (yearly) lease to a tenant.
  • The place of residence of the claimant’s spouse.
  • Location of vehicle registration.
  • The nature and payment of taxes in another state or county.
  • The address used on such things as:
    • State and Federal Tax Returns
    • Driver’s License
    • Voter Registration
    • County Tax Rolls
    • Utility Billings

There is no exemption given for Commercial Properties, Vacant Land, Secondary Homes, Vacation Homes, Cabins, Time-Shares, or other types of transitory housing. These properties are taxed at 100% of the market value.

When applying for the primary residential exemption, be sure to include at least two forms of supporting documentation:

  • Copy of Driver’s License (preferred)
  • Copy of Voter Registration
  • Copy of Utility Bills
  • Copy of Tax Returns
  • Copy of Motor Vehicle Registration

The Primary Residential Exemption Application can be printed and submit by mail or in person.

Return completed applications to:
Davis County Assessor’s Office
Attn: Primary Residential Exemption
PO Box 618
Farmington, UT 84025

Instructions: Click on a question to view and/or hide the associated questions answer.

Frequently Asked Questions

Contact Information

Physical Address
Davis County Admin Building
Assessor's Office (Room 302)
61 South Main Street
Farmington, Utah 84025

Mailing Address
Davis County Assessor's Office
P.O. Box 618
Farmington, Utah 84025

Phone Numbers
(801) 451-3250 :: Real Property
(801) 451-3249 :: Personal Property
(801) 451-3134 :: Fax

Monday – Friday
8:00 a.m. to 5:00 p.m. (except county holidays)

Copyright © 2015 Davis County Government