Hello, it's one of those lovely Prescott weekends, isn't it? I'm Gary Edelbrock, and like most of you, I've received my Notice of Value. But, what's that? Yavapai County Assessor Pam Pearsall explains.
I Don't Understand My Notice of Value. What Does It All Mean?
By: Pam Pearsall, Yavapai County Assessor
Ah, the Notice of Value. Yes, it looks intimidating doesn't it? Basically the Notice of Value (NOV) is exactly what it says. I am letting you know the amount I have valued your property at. This is important, because while the Assessor's Office does not set the amount of taxes you pay, it does show the assessed value which is used to calculate your share of the tax bill, set by taxing jurisdictions. So go dig your Notice of Value out of the round filing cabinet so you can follow along.
The first item you may notice on your NOV is the date at the top. This is the current value of your property that will be used to calculate your share of taxes for the following year. For example, you just received your NOV with an effective date of Jan of 2013; this was your NOV for the tax year 2014. This is so you can see the value of your property according to the Assessor's Office, and you have an opportunity to appeal that value before you are taxed on it.
The box in the middle is what has all the important information. It gives you your parcel number, the date the notice was mailed out, and the appeal deadline if you don't agree with our numbers. Then there are two lines that compare the values of the current tax year and the values to be used for next year.
Now we come to the real meat of the NOV: First, the Legal Class. This classification is very important, because not all properties share the same tax burden. The value of owner occupied residences, business, vacant land, or agriculture, to name a few, are all taxed at different rates; 10%, 19%, 16% and 16%, respectfully. A property that is a primary occupied residence is a legal class 3, so that means that the value of the property will be multiplied by 10%, to come up with your assessed value. It is very important to know what your Legal Class is and if it is correct.
So let's say your home is primary occupancy (Legal Class 3 assessed @ 10%), and the Assessor sets the value of your home at $150,000. The value of $150,000 is multiplied by 10%, or 0.1 which equals 15,000. This is your assessed value, which you see in the box. It's easy enough to understand, right? But wait! There's more! This is just your Full Cash Value. Surely you didn't think it would be THAT simple!
There are two categories of value: Full Cash Value (FCV), and Limited Property Value (LPV). Full Cash Value is basically the market value of your property, or what you could probably sell your property for. Limited Property Value is a figure that is arrived at by doing some crazy math formula that is set by the Legislature. A lot of the time the FCV and LPV end up being the same, but if the market value of your property dramatically increases, your LPV would also increase. There are currently two types of value because there are currently two types of taxes.
The two categories of taxes are Primary and Secondary. Primary taxes are the taxes needed to fund everyday government operations. Examples of this are school districts and cities, and this is based on your Limited Property Value. Your assessed LPV is multiplied by the tax rate of primary taxing jurisdictions to give you your primary taxes. One nice thing is homeowners receive a State Aid to Education Credit. It's too complicated to tell you how this credit is calculated for this short article, but it is enough to tell you at this point it is a credit that is subtracted from the amount of primary taxes you owe, so it kind of gives homeowners a little break.
Secondary taxes are taxes that pay for extra expenses that are taxpayer-approved, such as school or city bonds, and special districts. These taxes are calculated from the Full Cash Value by taking your assessed FCV and multiplying it by the secondary taxing jurisdictions. Unfortunately, there is no extra tax credit for secondary taxes. Add the primary and secondary taxes together, and that gives you the total amount you owe for the year.
Remember, there is a common perception that if your valuation increases or decreases, your tax amount will follow; that is a false perception. Valuations are determined according to State Statute calculations for the Limited Property Value and by the buyers and sellers in the market place for the Full Cash Value. Each taxing jurisdiction sets their tax rates against the values noticed by the Assessor's Office. For example, if a jurisdiction sets their budget at $1,000,000, they will receive that amount of money regardless of whether the Assessor's values increase or decrease.
Check out the awesome video entitled "Nuts And Bolts" at the Assessor's webpage. Go to http://www.yavapai.us/assessor/assessor-videos.
And don't forget - you can appeal the assessed value of your property, but you must do so by April 16.
Pamela J. Pearsall, Yavapai County Assessor, serves all Yavapai County citizens. Please contact our office if you have any questions. We are here to help you.