All You Want to Know About Your Property Tax Bill but Were Afraid to Ask Karl Green UW Extension – La Crosse County.

All You Want to Know About Your Property Tax Bill but Were Afraid to Ask

Karl GreenUW Extension – La Crosse County

All You Wanted to Know About Property Taxes but Were Afraid to Ask

• What is a levy? • What is a mil? • What’s the difference between your assessment

and an appraisal?• What’s an assessment? • An assessment ratio? What is the difference

between a lower assessment ratio and a higher assessment ratio?

• What is equalized value?

Who pays property taxes?

• You do!• Any property owner – Home owner– Land owners

• Ag (Use-value assessing) • Forest (MFL, Ag. forest, etc.)

– Business owners– Even renters pay taxes (although perhaps not directly…)– Property doesn’t have to be stationary

• Personal property (income generation)

Are all Property’s assessed the same

• No: Use value, MFL• What is use value assessment? • Specifically, the assessment value of

agricultural land was changed from market value to use value. In a use value assessment system, the use of the land is the most important factor in determining its assessed value.

• http://www.revenue.wi.gov/pubs/slf/pb061.pdf

• Your property is assessed by:– Municipal assessor (assessing department), or– Independent Assessing contractor acting on your municipality’s behalf

• Your property is typically calculated on two components:– Land– Improvements– Combination of this is your Total Assessed Value

• Your property’s value can be determined a few main ways:– Market Sale of property– Comparison of like properties– Income generation ability (rental or commercial in particular)– Replacement value/insured value

• Total Assessed Value: Total value of your property, distributed between your land value and improvement value

• Estimated Fair Market Value: The estimated value of your property, determined statistically by DOR through annual “arms length sales”

• Arms Length Sales are sales between a willing buyer and a willing seller, and not influenced by some non-typical circumstance

Assessed Value vs. Est. Fair Market

Assessed value• Determined by your

municipal assessor, based on:– Historical sales in the

municipality over the past year

– Inspections following building permits/construction• New• Remodel/additions

– Reassessment

Estimated Fair Market value• Estimate!!!• Calculation based on

historical sales submitted to DOR by assessor (Full/Equalized Value)

• These calculations help establish the Assessment Ratio

• Ratio difference between your municipality’s Total assessed value/Total estimated fair market value (Equalized Value)

• This changes as assessment roll becomes outdated!• Assessment roll becomes outdated when assessor

isn’t reviewing – historic sales – Reviewing x% properties annually – New construction or remodels

What is the Assessment ratio?

How does the average assessment ratio impact tax payers?

• The assessment roll is continually losing accuracy– Market changes

• Supply/demand changes

– Interest rate changes– New construction– Property removal– Annexations of

municipality– Etc.

• Without an accurate assessment roll, there becomes room for error between your assessment and the fair market value

• If some people are paying less, other people are paying more!

• Without equity, your assessment process loses credibility

• Common misconception:– lower assmt. ratio saves

municipality/person taxes

Village of Holmen - 2001

Village of Holmen – 2002

Your property tax is determined by…

• Property Total Assessed Value x Municipal Mill Rate

• Municipal Mill Rate =

• Indiv. Prop. Assessed Value x

Total Tax LevyTotal Municipal Assessed Value

Total Tax LevyTotal Municipal Assessed Value

• Net Assessed Value Rate– The combined mill rates of all taxing jurisdictions– So what is a mill rate?– Mill (milli) = 1/1000th

– When we say mill rate, we will communicate it as the rate paid per $1,000 value

– 0.02146 mill rate = $21.46/$1,000 value– A $100,000 house would pay $2,146.91 net

property tax (before any credits)

Taxing Jurisdictions

• State of Wisconsin• Technical College• County• School District• Local municipality• Other potential “Special Improvement Districts”– Lake Districts– Sanitary Districts– Water Districts– Business Improvement District

Apportionment• Apportioning the amount each municipality pays

of the County Levy• Equalized Value (not assessed value) used for

each municipality– Why?– What would happen if they used the assessed value?– Municipality taxpayers with a low assessment ratio

would get a break on County taxes, School District taxes, Technical College taxes, WDNR taxes, Etc.

– Without Equalization, there would exist a moral hazard for municipality to keep your assessment ratio low

Questions

• Karl Green• La Crosse County UW Extension• [email protected]• 608-785-9763