What is Revaluation or Re-evaluation?
Revaluation, also termed as re-evaluation or reassessment, refers to the process of updating the estimated value of a piece of property. This is typically done to reassess property taxes or to determine a more accurate market value at a given point in time. Local governments commonly conduct revaluations to ensure that property taxes reflect current market values, which can shift due to economic conditions, improvements, or deterioration.
Key Aspects of Revaluation:
- Purpose: Primarily executed for adjusting property taxes to reflect current market conditions.
- Frequency: Can vary; some localities may perform annual revaluations, while others might do so every few years.
- Implications: Modified assessments impacting property tax liabilities.
Examples of Revaluation
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Residential Property Revaluation: A city conducts a revaluation of all residential properties every five years. A homeowner whose property’s market value has increased during this period would see a rise in its assessed value, potentially leading to higher property taxes.
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Commercial Property Reassessment: A county reassesses all commercial properties following a significant commercial development boom. This revaluation reflects the rising commercial property values, impacting the overall tax revenue for the local government.
Frequently Asked Questions about Revaluation or Re-evaluation
Why is revaluation necessary for properties?
Revaluation is necessary to ensure that property taxes remain fair and equitable by reflecting the current market value of properties, thereby preventing outdated valuations from skewing tax burdens.
How often are properties revalued?
The frequency of revaluation varies by jurisdiction and can range from annually to every few years. Specific local regulations will determine the revaluation cycle.
What factors can lead to a property revaluation?
Factors include significant changes in the real estate market, economic conditions, substantial improvements, or damages to the property, and policy changes by local governments.
How does revaluation affect property taxes?
Revaluation can either increase or decrease property taxes. An increased assessed value usually results in higher taxes, while a decreased value can lower the tax burden.
Can property owners challenge revaluation results?
Yes, property owners can often challenge revaluation results by appealing to local assessment boards or equivalent regulatory bodies if they believe the reassessment is inaccurate.
Related Terms and Definitions
- Appraisal: The process used to determine a property’s market value, which is an integral part of the revaluation process.
- Assessed Value: The monetary value assigned to a property for tax purposes, often derived from appraisal or revaluation.
- Market Value: The price at which a property would sell under normal market conditions.
- Property Tax: A tax levied on real estate based on its assessed value.
Online Resources
- National Association of Realtors (NAR) - Educational articles and resources on property appraisals and valuations.
- International Association of Assessing Officers (IAAO) - Offers training and publications related to property assessment and taxation.
- IRS Guidelines on Property Valuation - Comprehensive resources on regulations regarding property assessments for tax purposes.
References
- “Property Assessment and Taxation,” International Association of Assessing Officers (IAAO)
- National Association of Realtors (NAR), various articles and resources on property valuation.
Suggested Books for Further Studies
- “Real Estate Valuation In Market Economies” by Grant Ian Thrall
- A comprehensive resource on real estate valuation methods and principles.
- “Appraisal Institute of Real Estate Appraisal” by Thomas Grissom
- An authoritative guide on standards and practices in real estate appraisal.
- “Mass Appraisal Valuation” by Robert J. Gloudemans
- Explore the methodologies of mass appraisal and application in revaluation processes.
