Why is bond debt added to the sale price for assessment purposes?
The law requires that when calculating the sales price of a property, the Assessor must convert all non-cash items exchanged in a sale (i.e., debts assumed by the buyer from the seller, or items traded that the buyer accepts in lieu of cash) to their cash equivalent value. The Assessor must then combine the cash equivalent components of a sale with the cash that changed hands in order to derive a full cash value. Now why is the law structured that way, you ask? Well, it’s structured that way to ensure that all property owners are treated the same, that like properties share the same property tax burden, and that all properties share the property tax burden in proportion to their true, full cash, market value. If debts and other non-cash consideration were ignored, and only the cash that changed hands was considered as the value of property, then there would be huge disparities of assessments between otherwise identical or very similar properties changing ownership at the same point in
