Assessed vs. Fair Market Value on Your Tax Bill
Assessed Value
This is the dollar value placed on a parcel of property by the Assessor's Office. It is computed by analyzing thousands of individual sale transactions, hundreds of inspections and a thorough study of all Superior neighborhoods. This process is critically important in maintaining equity between and among all taxpayers in the city.
Estimated Fair Market Value
Estimated Fair Market Value is calculated by dividing the properties total assessed valued by the average assessment ratio. This ratio is applied to all property, including personal property, regardless of type or location of the property. In theory, this should approximate the current market value of the property if all classes of property changed in value at the same rate. The Department of Revenue (DOR) determines the average assessment ratio, which determines fair market value estimate on your tax bill. The fair market value is not utilized in determining your overall taxes. It is used to apportion tax levies among municipalities and is used in the distribution of shared revenues.
The reason DOR equates all municipalities to an estimate of fair market value (actually equalized value) each year is to ensure the uniform distribution of shared taxes across municipalities. The assessor, on the other hand, assesses each property to make sure that each property pays their fair share of tax on an individual level.
Estimated Fair Market Value vs. Assessment
The estimated fair market value on the tax bill is a less reliable estimate than that prepared by the assessor. The DOR does not inspect or prepare individual value estimates for any residential or commercial property in the City of Superior. It is only to be used as a tool to check your assessment.
The important thing to point out is that ALL property in the City of Superior had the same factor applied to it to determine its estimated fair market value. Also, it is important that you know that it is the assessed value, in all cases, used to calculate your property taxes.
State law requires assessor's be within 10% (higher or lower) of the state's equalized value at least once in every 4 year period.
Remember, the "estimated fair market value" like the back of the tax bill states is an "estimate" and is only "approximate". It is primarily a barometer with which to measure the equity of your assessment in comparison to other properties in the community.
