Real property includes land, improvements to land, structures, and certain equipment affixed to structures. Characteristics of real property that influence the value include but are not limited to zoning, location, view, geographic features, easements, covenants, and the condition of surrounding properties.
State law requires that County Assessors value all taxable property at 100% of its true and fair market value in terms of money, according to the highest and best use of the property. That means that the Assessor must first know what similar properties are selling for and what it would cost to replace it. There are three basic approaches to the valuation of real property:
- Market or sales approach: Comparison of a property with the characteristics of similar properties that have recently been sold.
- Cost approach: Estimate of the replacement cost of a structure, and adjusting that estimated value to account for depreciation and obsolescence.
- Income approach: For Commercial/industrial property; an analysis of a property’s value based on its capacity to generate revenue for the owner.