Ch 5 Unit 9 Taxation

What are two reasons for making land the basis of taxation?

1) The usual stability of land values makes land taxes predictable.2) The attachment of taxes to land makes enforcement reliable.3) Land is traditionally related to productivity and wealth; government takes its share.

How often are ad valorem taxes paid?

Annually

What appraisal methods do tax assessors use to determine the assessed value of a property?

Assessors use any of the standard appraisal methods—Sales Comparison, Cost, Income—to assess properties, depending on the type of property. Agricultural land valuation is based on land productivity. The assessor uses whatever approach provides the best estimate of market value, which may then be modified according to formulas to arrive at an assessed value.

The tax rate for each taxing entity is calculated by

Dividing the amount of revenue required by the tax base

a parcel of real property that is owned and occupied as a family home.

Homestead

A portion of a property's value that is exempted from taxation because the property, or part of it, is owned and occupied as a family residence.

Homestead exemption

What are some circumstances that typically trigger a reassessment of a property?

Improvements to the property in general. Specifically, basement finishing, garage additions, swimming pool construction.

The percentage of full or market value at which properties are assessed is called

Level of assessment or LOA

How is tax based formulated?

Tax base = assessed value - exemptions

determines how much of a tax levy the tax base will receive.

Tax rate or millage rate

state that assessors should conduct a physical review of properties at least every four to six years, including an on-site verification of property characteristics.

The International Association of Assessing Officers (IAAO) guidelines

What is a tax levy?

The amount of money the municipality must raise through the property tax.

The major tax area in tax districts is

The school district

Real property tax exemptions are granted on the basis of many different criteria, including the following:

The use to which the property is put The owner's ability to pay taxes The desire of the state and local governments to encourage certain economic or social activities

How are special assessment taxes paid?

They are normally paid each year for a certain number of years by the owners of the properties that have been improved.

general property taxes are levied on

ad valorem basis aka the assessed value of the property

what are county and township officers called?

assessors or appraisers

How is the tax rate determined?

by dividing the taxing body's budgeted amount to be collected from real estate taxes by the tax base: tax requirement divided by tax base = (millage rate) tax rate

How is each property owner's tax bill determined?

by multiplying the tax rate for each taxing district times the taxable value of the property.

If the taxpayer can redeem the property by paying the delinquent taxes and any other charges before the tax sale occurs, this right is known as an

equitable right of redemption

tax districts

established to collect funds for providing specific services, e.g., schools, fire protection, parks, community colleges, libraries, road maintenance

If taxes remain unpaid for a period of time specified by state law, the tax collecting agency may enforce the tax lien in several ways, depending on what the law prescribes such as:

forced sale of the property

If a taxing entity initiates an assessment, the assessment creates an

involuntary tax lien

A property owner generally qualifies for a homestead exemption by meeting two criteria:

is head of a family resides on the property for a required length of time

What is The role of the assessor in the taxing process?

making the valuation and notifying the owner of the assessed value; other tax officials determine the tax rate and the tax levy.

How much is a mill?

one one-thousandth of a dollar ($.001). A tax rate of one mill means that the owner pays one dollar for every thousand dollars of assessed value.

The purpose of taxation is to

raise funds to pay for municipal services

what are some examples of a special assessment

sidewalks water service sewers

a tax levied against specific properties that will benefit from a public improvement.

special assessment

Established to pay for the cost of a specific improvement or service that benefits that area.

special tax district

If the taxpayer redeems the property after the tax sale, this right is known as a

statutory right of redemption

the total of the appraised or assessed values of all real property within the area's boundaries, excluding partially or totally exempt properties:

tax base

a legal instrument for conveying title when a property is sold for non-payment of taxes.

tax deed

a lien against real property for the failure to pay property taxes.

tax lien

The application for a tax deed causes the taxing agency to institute a

tax sale or tax foreclosure

the assessed value after all exemptions and adjustments have been taken into account.

taxable value

Property taxes are based on

the assessed value of property

A tax sale is frequently some type of auction usually conducted by

the sheriff

If property owners initiate the assessment by requesting the local government to provide the improvement, the assessment creates a

voluntary tax lien