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Property value and taxes Q & A

| December 11, 2010 8:00 PM

Here are some questions and answers from Kootenai County Assessor Mike McDowell (via the Kootenai County website):

How are the taxes on my property determined?

• Taxpayers need services.

• The taxing districts (counties, cities, schools, highways, fire, water, sewer, library, etc.) are required to provide services needed by their constituencies. This drives the budget to provide those services.

• The budget is used to determine a levy rate. The levy rates for each individual taxing district where a property is located are added together to arrive at the total tax rate for any particular property.

• This rate is multiplied by the net taxable value of the property to determine the amount of the tax charged.

• The levy rates for each taxing district and the total levy rate appear on the tax bills mailed by the Treasurer's Office.

Why do property values change?

• A property's value may change for a number of reasons. The most obvious is that the property changes. A bedroom, garage, or bathroom is added, or part of the property is destroyed by vandalism or fire.

• The most frequent cause of a change in value is a change in the market. If a community's major industry leaves, property values can collapse. As older neighborhoods with good quality housing are discovered by young homebuyers, prices gradually rise and then may even soar as the neighborhood becomes fashionable. A shortage of detached homes in a desirable city neighborhood can send prices to extreme levels. In a recession, larger homes may stay on the market for a long time, but more affordable homes are in demand, so their prices rise.

• In a stable neighborhood, with no extraordinary pressure from the market, inflation may increase property value.

How does the Assessor determine the value on my property?

• Buyers and sellers in the real estate market establish value. The Assessor's staff researches the market and collects information about properties to estimate value.

• The Assessor's Office has no control over tax rates.

• The Assessor uses standard methods, which utilize the three traditional approaches to value (cost, market, and income), to estimate the fair market value of a given property.

• It is important to note that the Assessor is simply measuring the information produced in the market to determine the estimated value. The economic principles of supply and demand, along with the desires of the purchasers and sellers of property, determine fair value.

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