What is taxable value?
Taxable value is the value used to calculate your tax bill. The taxable value is adjusted annually as the lesser of assessed value (market based – determined by the Assessor) and capped value. Capped value is the prior year’s taxable value, less taxable value of losses, capped by an increase of the lesser of 5% or the rate of inflation, plus assessed value of additions. Taxable value is uncapped when property is sold or transferred.
Taxable value refers to a percentage of the assessor’s appraisal according to a state-prescribed formula, after any exemptions are removed. • An assessment ratio of 50% is multiplied by the assessor’s appraisal to get assessed value. • Then, the assessed value is multiplied by 9% for residential and 10% for all other property classes to get taxable value. • Therefore, the taxable value of residential property is 4.5% of the assessor’s estimate of value; for commercial and agricultural property, it is 5% of the assessor’s value . • To calculate annual taxes for a property, the taxable value is multiplied by the mill levy.
Taxable value is the value used to calculate your tax bill. Although your assessed value will increase with the market, your taxable value is capped meaning it can only increase 5% or consumers price index, whichever is lower. Once a home is sold, the cap is removed and the new taxable value is usually about half of the purchase price or the current State Equalized Value (SEV) on your parcel.
