all you want to know about your property tax bill but were afraid to ask karl green uw extension –...
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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
