What Determines the Property Value Determined by a Tax Assessor?


Quick Answer

A tax assessor determines the property value of a structure in one of three ways; by sales evaluation, replacement cost or possible income derived from renting the property. To obtain these values, the assessor gathers information about the property and any value added by the property owner, according to Investopedia.

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Full Answer

To value a property by sales evaluation, the assessor looks at the recent sales value of properties in the immediate area that are most like the assessed property. The assessor takes into account whether nearby properties were under or over-selling, the specific condition of the property being assessed and the location of the property.

Valuing the property by replacement cost bases the value based on how much the property would be worth if empty. This method takes into account any depreciation that the property has undergone as well as any value added to the property through improvements.

The income method of valuation determines the assessed value by looking at the amount of income that the property can earn the owner if it is rented out. This method may be the most difficult, as it must consider maintenance costs, taxes and insurance costs, as well as the cost of managing the property.

Each method is used to decide upon a market value for the property. To calculate the actual assessment value, the market value is multiplied by the assessment rate set for that particular area.

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