Relationship of Property Assessment Values and Property Tax

Over the years there has been a misconception of the relationship between the assessed valuation placed on properties in Twin Falls County for property tax assessments and the actual property taxes levied to the owners of those properties. It is a commonly thought that the assessed value is the only factor determining the size of the property tax bill. This is not true.

There are two factors involved in the calculation of property taxes on a property.  One factor is the assessed value of property and the second factor is the levy or % of tax that is multiplied against that property’s assessed valuation.

Determining the assessed value of properties in Twin Falls County is the assessor’s responsibility. Idaho law requires all property be assessed at market value each year. To do this, the Assessor’s Office develops valuation guidelines that are based on sales prices of similar homes in your neighborhood area. Some factors influencing what a buyer would pay for your home and land are size, quality, age, condition and location. We use this information to estimate how much a buyer might pay for your home if it were to sell on January 1 of the current year.

The value of your property may change each year depending on real estate market changes. An appraiser from our office must visit your property as least once every five years. In the other four years, we use information from property sales and /or from the inspections of other properties to estimate the current value for your property.

Idaho Law and the Idaho State Tax Commission establish many rules and requirements that the Assessor must follow in determining the assessed values for the current year. The main factor is sales of properties. The Assessor’s Office is required to establish a market value for each property within the county as of January 1, 2017 for the current tax year. The Assessor’s Office is required to only use valid sales information on properties that sold from October 1, 2015 thru September 30, 2016 in determining valuations for the 2017 or current tax year. The sales are studied and if necessary the sales are time adjusted to the January 1, 2017 target date. With the State mandated rules, we are required to always use last year’s valuation base to determine current assessment values.

Once the values are finalized, an assessment notice with the current valuation will be mailed to each owner by the first Monday of June (June 5, 2017 for this year). The resulting information is reviewed by the Idaho State Tax Commission under State of Idaho rules and regulations and if within acceptable ranges, those assessed values are approved for the current tax year. These finalized assessment values will be used by each taxing district in the next step in the property tax process.

The second factor in calculating property tax is to determine the levy used in property tax calculation. The levy is set by the taxing districts such as the cities, county, schools, and other taxing districts. The amount of property tax dollars needed is set when officials for each taxing district determine the annual budget amount that is necessary to provide the district’s services by reviewing items such as inflation, changes in revenue and changes in services and other expense items.

The part of the budget to be funded by property tax dollars is then divided by the total assessed valuation of all properties within that district. The result is the district’s tax rate (or levy). This rate, multiplied by the taxable value of your property, determines the amount of taxes you owe to that district.

The assessed value of your property is not the only factor to determine the size of the tax bill. If the amount of budget dollars that a taxing district needed remained the same but the total overall assessed value in that district increased by 50% then the levy would drop by about 33.3% producing the same amount of tax dollars needed for the taxing entity. The same scenario will apply if the total overall assessment values dropped by 50% then the levy would increase by 100% to create the same tax dollars for the district.

Taxpayers who feel their tax bills are too high usually blame the assessor’s office.  Most tax increases are brought about by inflation and increased budgets, which require increases in the levies certified by cities, schools, and other taxing districts. The tax rate or levy may also increase due to a taxing district’s emergency needs or voter-approved bonds or override levies. For these types of tax increases the assessor bears no responsibility. If taxpayers want information concerning the budgets that establish the levies, they should attend the hearings held by the taxing districts on the dates that are listed on the assessment notice that was mailed out on June 5, 2017.

The Assessor is responsible for the valuation on properties within Twin Falls County but that is only one factor in the process, but is not the determining factor of the overall property tax obligation that we see on our tax bills.

 

Gerald Bowden,
Twin Falls County Assessor
P.O. Box 265
Twin Falls, ID 83303-0265

 

Amended 6/2017