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Assessment of Tax Burden

Assessment of Tax
the value set on taxable property.

Property Tax a "tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property."

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Property Tax System

There are three main parts to the property tax system:

An appraisal district in each county sets the value of taxable


property each year. The chief appraiser is the appraisal districts chief administrator and is responsible to a board of directors for its operation.

An appraisal review board (ARB) settles any disagreements


between you and the appraisal district about the value of your property.

Local taxing units, which include the county, cities, school districts,
and special districts, decide how much money they will spend each year. This, in turn, determines the tax rate they need to set and the total amount of taxes that you and your neighbors will pay.

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Constitutional Standards for Property Tax


Taxation must be equal and uniform. With some exceptions, all tangible property must be taxed on its January 1 market value. All property is taxable unless federal or state law provides an exemption for it. Property owners have a right to reasonable notice of increases in appraised property values. Each property in a given appraisal district must have one appraised value.

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Assessing Property
Cost (or replacement) An assessor will deduct the reasonable depreciation of the property but add the value method of the land. This approach is most appropriate
when the assessment is of a new and unique or specialized property.

Income method

To arrive at an assessment, the assessor considers the business taxes, the amount of income the property may generate, insurance costs, rates of vacancy, operating expenses, maintenance costs, and the current interest rate charged for borrowing money for making improvements or repairs on such a property.

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Assessing Property
Market or sales comparison method
This approach is similar to the method banks employ to value property when they consider issuing a mortgage.

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How Property Tax Calculated

Taxable Value Assessed Value


(Last year's taxable value) - (losses) + (5%) + (additions); OR (Last year's taxable value) - (losses) + (the rate of inflation) + (additions).
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Chapter End

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