In Idaho, property for tax purposes, is
assessed at fair market value at least once every five
years. So the property value may have increased significantly since
it was last assessed 4 or 5 years ago.
Historically, assessing
property at full market value was an outcome of the 1%
Initiative in 1978 in Idaho. A good result, I would say since
property taxes are not subject to the whim of the assessor but rather
the whim of the market value of the property. (There are some
exceptions as you might suspect. More below.) Idaho went from having
one of the worst to having one of the best property tax assessment
processes in the U.S. Oversite of state's property tax assessment
program is done by Alan Dornfest with the ID State Tax
Commission.
Establishing fair market value in Idaho for tax purposes is not as
easy as you think. Realators/buyers of real estate are not required
to reveal the sale price to the county assessors in ID. (This
requirement recently lost by one vote in the Senate.) So finding
comparable sales to determine mkt value can be a problem.
If there is a privately owned single family dwelling on
the lot, then the half of the first $100,000 of valuation of the
house (not the lot) is exempt for property tax purpose. There is no
exemption on the lot. At least not yet. Lots and houses are assessed
seperately. Exemption for private houses was the result of a ballot
initiative lead by Sen. Ken Robinson (D) of Boise , as I understand
it, subsequent to the 1978 1% initiative. Apartments do not receive
this exemption since they are considered commercial property for tax
purposes.
If the land is assess as ag land, then it is valued at its use value
in ag. and not at its "highest and best use." This may seem unfair,
but there are a couple of benefits from this approach.
Lower taxes reduce the temptation of transforming ag land to
residential housing. This in turn
reduces urban sprawl. Also, since farmers can afford to
farm right up to the urban boundary, it provides a green belt around
cities, e.g., Indian Hills or Mountain View. So conceptually, the
cost of the tax loss to the tax district is offset to some extent by
the benefits of less sprawl and a green belt. This works for me.
Others may disagree.
So perhaps, the pool site price and assess value numbers Chuch
quotes, if they are correct, represent the value of the lot w/ and
w/o the house; with and without updated assessment; or w/ and w/o the
ag. use exemption or some combination or permutation thererof. Or
perhaps it is a bad negotiation on the part of the city. Or, perhaps,
a "deal." You be the judge. I haven't been following the conversation
so perhaps there are some important details I have missed.
My suggestion, ask Steve Fiscus. He is the county assessor and all
around good guy.
xxoo
Steve Cooke
> From: "Judith Brown" <jlbrown@turbonet.com>
> To: SCOOKE@novell.uidaho.edu
> Date: Fri, 27 Mar 1998 09:08:09 +0000
> Subject: (Fwd) Re: Swimming pool discourse
> Priority: normal
> Is Chuck's comment about assessed value and market value
> correct?
> Judy
> xxooxx
>
>
>
> > Can someone tell me why a piece of property in the city, selling for
> > $325,000 and a "good deal" at that price, was assessed for only $80,000?
> > Are there any more properties around like that?
> > What will happen to the assessed value of land and/or lots if this
> > sale goes through?
>
> Assessed values of property for tax purposes are typically a fraction
> of the actual market value.
>
>
> Chuck Harris
>
>
Associate Professor
Dept. of Ag. Economics & Rural Soc.
University of Idaho
Moscow, ID 83843
http://www.uidaho.edu/~scooke/
208-885-7170 (phone)
208-885-5759 (fax)