February 26, 2021

How often, how and why should your property be reappraised?

A cyclic real property appraisal is a legal requirement in the USA. The process of real property appraisal is undertaken by every county's respective appraisal district and is overseen by assessors. Reappraisal is conducted in various ways to ensure fair valuation one at least every 4 to 6 years. Learn more in this blog.

What is mass appraisal?

Property values are affected by a number of qualitative and quantitative factors, which makes individual analyses and appraisals of properties impractical for ad valorem tax purposes.

Mass appraisal is the process of valuing a group of properties as of a given date and using common data, standardized methods, and statistical testing to determine a market value for assessment purposes. It is the systematic assessment of the value of a set of homogenous properties, on a given date, by using standardized procedures. Mass appraisal makes the system uniform, accurate, time and cost-effective and applicable to the masses. To streamline the usage of limited resources and complete the valuation process in time for property tax purposes, county appraisal districts often employ Computer Assisted Mass Appraisal (CAMA) systems.

Changing values of properties and re-inspections

Ad Valorem taxes are attached to the
assessed value of the property, which in turn is determined based on your real property's current fair market value. To ensure a fair assignment of taxes, it is important for an assessor's office to maintain and update property characteristics data that may directly impact the property’s value.

Learn more about factors that may result in a change in valuation of your property here.

Tracking building permits, aerial photography and self-reporting are commonly used methods to update property characteristics data. The Standard on Mass Appraisal of Real Property (published by International Association of Assessing Officers), however, recommends that a physical review including an on-site verification of property characteristics be conducted at least every 4 to 6 years. Re-inspections are to include partial re-measurement of the two most complex sides of improvements and a walk around to identify additions and deletions. Photographs taken at previous physical inspections can help identify changes. Alternatively, jurisdictions may utilize digital imaging technology tools to supplement re-inspections with a computer-assisted office review following an initial physical inspection and an effective tracking system.

Reappraisals

Current market value implies an annual assessment of all property. It does not imply, however,

that each property must undergo a re-examination every year. Instead, valuation models based on property characteristics data can be recalibrated. Market adjustment factors can be applied based on criteria such as property types, location, size, and age. Market adjustments are highly effective in maintaining equity when appraisals are
uniform within strata.
Analysis of ratio study data can suggest groups or strata of properties in the greatest need of physical review. Physical reviews are instrumental in tracking changes to property and improvements that directly impact the assessed value of real property. As they also help deal with discrepancies occurring due to data errors, physical reviews are recommended every 4 to 6 years.

Real property reappraisals are accomplished in one of the following 3 ways:

  • Re-inspecting all property at periodic intervals - every 4 to 6 years.
  • Re-inspecting properties on a cyclical basis - one-fourth or one-sixth each year.
  • Re-inspecting properties on a priority basis as indicated by ratio studies or other

considerations while still ensuring that all properties are examined at least every sixth year.

Periodic reappraisals are what determine a change in your annual property tax bill amount. Here are 9 proven methods to reduce your property tax bill.
Is your property tax bill higher than your neighbor's? Learn what you can do about it now!

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Disclaimer

Articles presented here are for general information and education only. It is provided as a courtesy to the general public. SQD Taxtech LLC does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of SQD Taxtech LLC. Please cite source when quoting.

SQD Taxtech LLC, its managed affiliates and subsidiaries, as a matter of policy, do not give tax, accounting, regulatory or legal advice. Rules in the areas of law, tax, and accounting are subject to change and open to varying interpretations. You should consult with your other advisors on the tax, accounting and legal implications of actions you may take based on any strategies presented, taking into account your own particular circumstances.