2016-04-27 CC Packet - Laserfiche WebLink

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City of Centerville Residential Tax Changes Examined Although the Assessor's Office is considered by many to be the primary reason for any property tax changes, there are actually several elements that can contribute to this change, including, but not limited to: • Changes in the approved levies of individual taxing jurisdictions. • Bond referendum approvals. • Tax rate changes approved by the State Legislature. • Changes to the homestead credit, educational credits, agricultural aid, special programs (including "This Old House", limitations on increases in value) approved by the State Legislature. • Changes in assessed market value. • Changes in the classification (use) of the property. A combination of any of these factors can bring about a change in the annual property tax bill. 2016 Real Estate Tax Information The 2016 real estate tax bills were sent out around the middle of March. A brief review of the tax procedure is provided. Discussion The real estate tax is an ad valorem tax; that is, a tax levied based on the value of the property. The calculation of the tax requires two variables, a tax capacity value and the district tax capacity rate applicable to each individual property. Tax Capacity Tax capacity value is a percentage of the taxable market value of a property. State law sets the percent. Determination of tax capacity values have historically changed over the years although the payable 2016 are mostly unchanged from 2015. For the taxes payable in 2016 the rates are as follows: Tax capacity value for residential homestead property is determined as follows: Res. Homestead (1A) Taxable Market Value First $500,000 @ 1.00% Taxable Market Value Over $500,000 @ 1.25% Tax capacity value for rental residential property is determined as follows: One unit (413131) Taxable Market Value First $500,000 @ 1.00% Taxable Market Value Over $500,000 @ 1.25% Two to three -unit s (4131) Taxable Market Value All @ 1.25% Apts 4+ units (4A) Estimated Market Value All @ 1.25% Low Inc. Rental Housing Estimated Market Value All @ .75% Tax capacity value for commercial/industrial property is determined as follows: Commercial/Industrial (3A) Estimated Market Value First $150,000 @ 1.50% Over $150,000 @ 2.00% Note: These rates do not include the homestead exclusion that is calculated from the overall tax capacity value. This homestead exclusion deduction from taxable market value is based on a sliding scale up to a maximum market value of $414,000. 15