Real property sales, state law affect 1999 county valuations by David Lias One point that Clay County Assessor Leonard Rasmussen hopes to drive home to real property owners is a lesson, of sorts, on how to compare property tax rates from one year to the next.
He knows it's easy to get confused. Property owners traditionally receive two documents from the county early each year: an assessment notice, and a tax statement.
Confusion arises when they notice that the figures on the two documents aren't the same.
"A lot of people are comparing their assessment notices with their tax statements, and those are two different figures," Rasmussen said.
If taxpayers want to get an accurate idea of whether there have been changes in their properties' valuations, they should compare assessment notices from one year to the next, and not compare assessment notices with tax statements.
"The figures that we (Clay County) are sending out to property owners will be adjusted back to 85 percent as far as the taxable value," he added. "What taxpayers are comparing now are last year's figures that were adjusted to that taxable value, so if they would find out what their 1998 assessment value was versus their 1999 assessment value, then they could tell exactly what pretty much happened."
Government sets tax rates
Another misconception that many taxpayers cling to, Rasmussen said, is that his office determines property tax amounts each year.
"Every time you see valuations go up, you always think your taxes are going to go up, and in most cases they do," he said. "But as far as this office is concerned, it has no control whatsoever over taxes. The taxes are based on whatever levies are needed by the government entities, such as schools, counties, cities and townships."
One of the most important roles that the assessor's office accomplishes each year is establishing the market value of the various classes of real property in the county.
"What the people have to ask themselves is, is their property worth this (its assessed value) come time for selling," Rasmussen said. "If you feel your property's market value is listed too low, we want to hear from you, and if it's too high, we also want to hear from you."
Taxes, assessments differ
The state requires property to be assessed at its full market value, with the goal of property being taxed at 85 percent of its full value. Later this year, the state revenue department will send Rasmussen and assessors in other counties the information they need to make the proper calculations to roll back taxes to the 85 percent level for property taxes payable in the year 2000.
"The tax notice is 85 percent. That factor is given to us by the department of revenue, and is established after all boards (of local government) have met," he said. "And just to be clear, the notices that property owners recently received were their assessment notices."
Property owners usually receive their tax statements in January or February, informing them the amount of taxes they must pay before an April deadline to avoid penalty.
Assessment notices, Rasmussen said, are usually sent out the first part of this month.
"The assessments that we're sending out right now are 1999 assessment values payable in the year 2000," Rasmussen said.
Increases required by state Rasmussen has already informed the Clay County Commission that he must raise valuations on ag property 9 percent, and boost valuations of homes and the lots they are sitting on by 6 percent to meet requirements of state law. One thing this will accomplish, he said, is to better equalize the taxation of non-ag and ag property.
To calculate the needed changes in property valuations, Rasmussen's office reviewed the prices of property sales in the county, and identified the low, high and median prices.
"This establishes our level of assessment. We do see some properties that are close to 100 percent (of full and true value) but yet we still have some that are below it. The factor that they (the state revenue department) gives to us then, is based on the median, the middle factor, and this is to bring the property up to the market value," he said.
Clay County is currently experiencing a sellers' market, as far as non-ag property is concerned.
"We work with sales to justify our calculations, and things are not selling," he said. "If we had a lot of homes on the market to choose from, then it kind of gives us a picture of what they're actually worth, but when there are very few homes on the market, it tends to be a seller's market, and that kind of drives the prices up, too."
Ag land more challenging
The assessment process for agricultural land is more challenging, Rasmussen said. Often ag property's assessments are based on how much a buyer was willing to pay for it, and sometimes, they may pay more than the property is worth.
An additional consideration, he said, is the current general economic status of agriculture.
"Farming is getting real tough now because of the way the prices are for crops and livestock," Rasmussen said. "So until things sell, we're working on establishing what the market value is."
He urges assistance from county farmers to fairly assess agricultural property.
"If nothing is sold in this county, who says we're wrong? When things do happen to sell, give us an idea of where we're at as far as assessment versus to where the market is, and this is what we're trying to strive for," Rasmussen said.