How much will a property owner pay in taxes each year? The answer comes in many parts, with the starting point of “total market value” estimated for each property each year. The market value can vary widely from the property’s “taxable value,” the amount to which the tax rate is actually applied.
“The reason for the difference between a property’s assigned market value and its taxable value is solely attributable to the homestead exemption and other related exemptions,” Palm Beach County Residential Appraisal Department Director John Thomas told the Palm Beach Daily News.
As defined on the Palm Beach County Appraisal Department website, market value is the “estimated price a willing buyer would pay with a willing seller accepting, both being fully informed and the property exposed to the market for a reasonable period of time.”
The total market values are assessed each year as of Jan. 1.
If a property has changed hands within the previous year, its market value will be influenced, at least in part, by the recorded sales price, barring any unusual elements that might put restrictions on the property, including a landmark designation.
If a house hasn’t sold in the previous year, the market value is based largely on the prices fetched by nearby houses that have changed ownership, as well as an estimate of the amount it would take to reproduce the house in current dollars.
In the upper-price echelons, where homes are far from cookie-cutter, comparing properties can be complex, as each one-of-a-kind property has its own set of features that affect the valuation it receives.
“By law, physical inspections of properties must take place at least once every five years. But those inspections are often carried out only from outside the house because rules prevent appraisers from entering the interior of a home unless invited to do so by the owner,” Thomas said. “They can legally inspect the exterior of all property and the available of high-quality aerial photography also assists in the inspections.”
Other factors affecting valuation include the size of the site, the condition and size of the house, the year it was built, the quality of the materials used and whether there are any outbuildings. Appraisers also consider renovations or additions that can be verified with a physical inspection.