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Flashcards in Property Tax Consultant Review: Katie's Flash Cards Deck (59)
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1. Given the value and tax rate, calculate the taxes:

Value/100 * Rate = Taxes

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2. Given the taxes and value, calculate the tax rate:

Taxes divided by Value/100 = Tax Rate

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3. Given the taxes and tax rate, calculate the value:

Taxes/Rate = Value/100

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4. Intangible Personal Property:

May NOT be perceived by the senses; cash, accounts receivable, stocks, goodwill, trusts, customer listings, contracts, copyrights, permits, software

**NOT TAXABLE AS PERSONAL PROPERTY

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5. Appraised Value:

Market Value determined by applying accepted appraisal methods, complying with UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP). Same or similar methods and techniques will be used with same or similar kinds of property

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6. Market Value: Section 1.04

Price at which a property would transfer for cash under market conditions IF:

For sale in open market with reasonable time to find a purchaser

Both parties know all the uses/purposes and any restrictions of its use

Both parties seek to maximize gains and neither can take advantage of the other

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7. Taxable Value:

Amount determined AFTER deducting the amount of any applicable partial exemptions

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8. Depreciation

Loss of usefulness/value due to physical deterioration, functionality or economic conditions. Can be from any cause.

DIFFERENCE BETWEEN COST AND VALUE

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9. Income producing Personal Property

Property NOT permanently attached to real estate and other assets such as:

Inventory
Furniture
M&E
Vehicles
Improvements
Accounts Receivable
Cash, Goodwill
Customer Contracts

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10. Taxing Unit

Any county, city, town, school district, special district, junior college, hospital district or any other political unit of this state authorized to impose an ad valorem tax

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11. Special Use Appraisal: Chapter 23

Qualified open space land devoted to:

Agricultural Use
Timberland
Recreational Use
Wildlife Management
Scenic Land
Park Land
Airport Land
Open Space Land

NOT AN EXEMPTION

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12. Income Approach

Estimate of market value based on the monetary returns that property can be expected to produce. Best suited to COMMERCIAL property. Also known as the CAPITALIZATION method

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13. Income Approach to Value

NLA or NRA Net Leaseable Area OR Net Rentable

+ PGI Potential Gross Income

+ SI Secondary Income

- V & C Vacancy & Collection Loss
____________________________________________

= EGI Effective Gross Income

- OE Operating Expenses

____________________________________________

= NOI Net Operating Income

/ CAP Rate Capitalization Rate

____________________________________________

= TOTAL VALUE

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14. Cost Approach

Estimate of market value based on current cost to reproduce/replace less depreciation plus land value. Preferred on NEWLY CONSTRUCTED property.

Cost - Depreciation + Land = VALUE

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15. Comparable Sales/Market Approach

Estimate of Market value using sales of comparable properties. Adjustments made to subject property for age, size, amenities and characteristics. Used in MASS APPRAISAL by district for properties within the same assigned area.

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16. Tax Situs: Chapter 21

Only one category, place where it is taxable

Location on January 1

Where it is "normally" located on January 1, even if temporarily moved

Place where it returns between uses

Principal place of business or owner's residence. May NOT always be corporate headquarters

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17. Duties of Tax Assessor/Collector

Calculation of the tax rate

Preparation and mailing of tax statements

Collection of property taxes

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18. Correction of Appraisal Role: Section 25.25c

Chief Appraiser can correct the record for any of the previous 5 YEARS due to:

Clerical errors

Multiple Appraisals

Inclusion of property that does not exist in the form or at the location described

Not owned as of January 1

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19. Clerical Error: Section 25.25c

An error that:

Results from a mistake or failure in writing, copying, transcribing, entering or retrieving computer data, computing or calculating

Prevents a tax roll from accurately reflecting a finding or determination made by the chief appraiser, ARB or assessor

*** NOT resulting from a mistake in judgement or reasoning in the making of the finding or determination

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20. Types of Depreciation

Physical Curable: age, decay, wear

Physical Incurable: cost to cure estimated to be GREATER than value resulting

Functional Curable: poor design, hindered function, technology outdated

Functional Incurable: cost to cure would be GREATER than value resulting

Economic or External Obsolescence: market forces

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21. Correction Error on Appraisal Roll: Section 25.25d

PRIOR to delinquency date, owner or Chief Appraiser can file a motion with ARB to correct an error that resulted in an incorrect appraised value. Error must make value EXCEED by more than ONE THIRD the correct value. Owner must still pay late-correction penalty of 10 PERCENT of taxes on CORRECTED value.

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22. TX Constitution, Article VIII

Authorizes property taxation to fund Texas counties, cities, schools and special districts. ALL real and personal property is taxable unless specifically exempted by Federal law or state constitution

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23. Appraisal Districts

1979 adoption of Texas Property Tax Code created appraisal districts (254 counties in Texas but only 253 appraisal districts because Randall/Potter share a district)

100% market value appraisals and NO assessment ratios

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24. Life Cycle of a Market Area

Growth

Equilibrium (Stability)

Decline

Revitalization

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25. Factors of Value

Principles of:

Substitution

Supply & Demand

Balance

Conformity

Competition

Anticipation

Contribution

Change

When all align, property has HIGHEST & BEST use

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26. Phases to Property Tax Calendar

Appraisal: January - May

Equalization/Administrative (Remedy): May - July

Assessment (Judicial Review): July - September

Current Collection: October - January

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27. Appraisal Phase: (January - May)

Discovery - duty of the district (Section 25.02)

Listing - recording of ownership, property type and characteristics

Estimates Value - appraisal date of January 1 and must be generally accepted methods

Required Notices - sent April 1 for homestead properties, May 1 or sooner for all other properties

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28. Equalization Phase: (May - July)

Chief Appraiser submits appraisal role to the ARB by May 15 (Section 25.01)

Property owners file appeals by May 31 or 30 days after notice was delivered, whichever is later (Section 41.44)

Informal and formal hearing process, ARB can order changes (Section 25.25)

ARB certifies appraisal role when all protests have been heard (Section 26.01) by July 25

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29. Assessment Phase: (July - September)

Taxing entities receive certified appraisal rolls

Local jurisdictions adopt budgets

Tax rates adopted, appraisal role becomes tax roll

Assessor mails tax bills (Sept. - Nov.)

Some taxpayers dispute their ARB rulings and appeal to district court for Judicial Review

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30. Collection Phase: (October - January)

Local jurisdictions collect on tax bills, most mailed by October 1

Tax payments due by January 31, become delinquent on February 1