Estimating the market value of your property is simply a matter of determining the price most people would pay for it in its present condition. However, the Assessor has the monumental job of valuing all of the houses and office buildings in Lisbon. This includes estimating the value of all of the office equipment and fixtures. But it doesn't stop there. Each year the Assessor has to do the whole thing over again, because the market value of almost everything changes from one year to the next - as we all know. This is done so that the costs of schools, fire and police protection, health and recreational facilities, and other public services can be prorated over all taxable property in the Village. Your share of the cost of these services is based upon the value of your property relative to the total value of all property in the Village.
The value of your property, as determined by the Assessor, is called the "assessed value." The basis for assessed values is defined by law and varies by property type. Properties classified as Residential, Commercial, Manufacturing, Forest, Other and Personal Property are valued at 100% of full market value. The categories of Agricultural Forest and Undeveloped are valued at 50% of full market value. Agricultural land is assessed at 100% of its "use-value" (what the property is worth based on its use for agricultural production). Manufacturing values and use-values for agricultural land are determined by the State.
How the Assessor Values Property
To find the value of any piece of property the Assessor must first know what properties similar to it are selling for, what it would cost today to replace it, how much it takes to operate and keep it in repair, what rent it may earn, and many other dollar factors affecting its value, such as the current rate of interest charged for borrowing the money to buy or build properties like yours. Using these facts the Assessor can then go about estimating the property's value in three different ways.
The Sales Comparison Approach
The first way is to find properties like yours which have been sold recently. Their selling prices, however, must be analyzed very carefully to get at the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry to occupy the property and would pay any price to get in. Another may have sold for less money than it was actually worth because the owner needed cash right away and was willing to sell to the first buyer who made an offer. Using this approach (comparing the selling prices of properties similar to yours) the Assessor must always consider such over or underpricing to arrive at a fair evaluation of your property's value. Various statistical procedures are employed in this process.
The Cost Approach
The second way the Assessor can go about this is based on how much money it would take, at current material and labor costs, to replace your property with one just like it. If your property is not new, the Assessor must also determine how much depreciation it has suffered.
The Income Approach
The third method is used in addition to the other two if you happen to own property that provides you with a rental income, like an apartment house, a store, or an office building. Here the Assessor must consider such dollar factors as your operating expenses, taxes, insurance, maintenance costs, the degree of financial risk you have taken in earning income from your property, and finally, the return most people would expect to realize on this kind of property. Of course, if your property is the home you live in, the third approach cannot be used since you derive no income from it. But in any case, you can be sure the Assessor carefully considers all the available, reliable money factors pertaining to your property.
Why Assessed Value Changes From Year to Year
When market value changes, naturally so does assessed value. For instance, if you were to increase the total market value of your property by building a garage, or adding a family room, the assessed value would increase. Similarly, should your property's value be decreased by a fire, the assessed value would decrease to show the downward effect of this damage on the market value of your property.
For any number of reasons a neighborhood, or a particular house style, may become very popular, thus causing market values to rise at higher than average rates. The Assessor must constantly stay alert to spot these trends. Inflation and the economy of the entire community also affects your assessed value. We all know that as building material, labor and the cost of money increases, the value of the existing housing stock also increases. The Assessor has not created this value - people have made value by their transactions in the market place. It is the Assessor's responsibility each year to adjust existing assessments to keep pace with the market.
Assessed Value & the Tax Rate
The Assessor's primary responsibility is to find the fair market value of your property, so that you and other taxpayers may contribute a fair share of support for the community services you receive. For these services to continue, other agencies, as well as the Village, must levy taxes. The other taxing agencies include the Lisbon Public Schools, Dane County, and the Lisbon Area Technical College. Here again, state laws define the powers of these taxing agencies and the kinds of properties that are exempt from taxes, such as schools, scout camps, and churches.
Taxes levied by these other agencies are included in your tax bill with the taxes levied by the Village of Lisbon. Each year the governing bodies of the various taxing agencies propose budgets for the next year. To finance the expenditures in the budget, they total all expected sources of revenue such as state aids and shared taxes, license fees and tuition. This is subtracted from the estimated expenditures. The remainder, which is the total amount to be collected through property taxes, is the called the "tax levy."
The amount of the tax levy for the Village of Lisbon depends on the size of the Village budget, which is determined by the Village Board. The levy is raised by multiplying the value of all the property in the Village by a percentage, called the tax rate. The rate is the same for all property owners. When this tax rate is applied to the value of all the taxable property in the Village, it will total to the exact amount of money needed for the levy to help finance Village expenses. The tax rate is calculated by simply dividing the amount of taxes needed by the total assessed value of all taxable property in the Village.
Tax Rate = Levy ÷ Total Assessed Value
Once the rate is set, the assessed value of your property is used to determine your portion of the levy. The tax rate when multiplied by the assessed value of your property, equals what you owe in taxes - your tax bill. The tax rate is often expressed in terms of dollars per thousand, or as a "mill rate." The entire taxation process requires the cooperation of several parts of Village government.
The Assessor sets the value of your property. The Village Board determines the cost of Village services, thereby establishing the tax rate necessary to generate funds for these services.
Differing With the Assessor's Market Value Appraisal
If your opinion of the value of your property differs from the Assessor's appraisal, by all means come in and discuss the matter with us. The personnel in the Assessor's Office will be glad to discuss any questions you may have about our appraisal. If you have evidence that the appraisal is more than the actual fair market value of your property, we will welcome the opportunity to review all pertinent facts. After talking with us, if you still find a significant difference between our appraisal and what you feel is your property's market value, you may file a formal objection to your assessment. This objection must be filed with the Board of Review in writing.
Open Book Inspection Period
Property owners may inspect the preliminary assessment roll in the Clerk's Office at Village Hall during the specified Open Book hours, which is usually in March or April. Please note that you do not have to wait for this time of year to speak with the Assessor about your assessment; that can be done at any time. However, changes to your assessment can only be done during this time period. This "open book" inspection period is set aside to correct obvious clerical errors, which were made in compiling the assessment roll.
Property owners who wish to compare assessments may use the counter copy of the assessment roll in the Clerk's Office. Owners who disagree with their assessment should personally discuss it with the assessor. If an error was made, or if there is evidence that the appraisal is more than the actual fair market value of property, the Assessor's Office will review the pertinent facts and make appropriate adjustments. The best evidence of value is a recent sale price of the property or the sales prices of comparable properties.
After meeting with the Assessor during Open Book, owners who still feel that the value of property is overstated may file formal written objections. Objections must be in writing on forms that may be obtained from the Clerk's Office or download the form, and are to be returned no later than 48 hours prior to the Board of Review meeting date.