Assessed Value: This is the dollar value placed on a parcel of property by the Assessor. It is computed by analyzing thousands of individual sale transactions and thousands of inspections It is the Assessor's estimate of market value. It is important for maintaining equity between and among all taxpayers in the municipality.
Estimated Fair Market Value: Is calculated by dividing the property's total assessed valued by the average assessment ratio. This ratio is applied to all property, including personal property, regardless of type or location of the property. In theory, this should approximate the current market value of the property. This value estimate is determined by the Department of Revenue(DOR). It is used to apportion tax levies among municipalities and is used in the distribution of shared revenues.
History: Back in the early 1980's, when the legislature passed the law that this be included on all tax bills, was a time across Wisconsin when Assessors for the over 1800 municipalities were not required to assess property at market value during any time interval. As a "truth in taxation" measure, the legislature thought it was important for their constituents to know what in terms of value their assessment actually meant. Because the DOR already prepared municipal "equalized values," the legislature thought that these estimates made at the municipal level should be provided at the property level. This was an easy answer to their problem. Remember, the intent was to show whether the assessment on a property was at all accurate. It was never meant to actually be your individual property estimate. But, at least from the taxpayer's standpoint, it meant more than the assessment--at that time. For instance if the assessor was assessing property in your municipality at 10% (and you had no idea of that fact) and your tax bill showed an assessment of $10,000 you might think "boy am I getting a good deal--I know my house is worth at least $60,000." However, if you realized that the $10,000 actually equated to approximately $100,000; you might not be so happy. (Since 1986, after this was enacted, the legislature tightened the law and we now are required to assess within 10% of market value at least once in every four year period.)
The reason DOR equates all municipalities to an estimate of fair market value (actually equalized value) each year is to ensure the uniform distribution of shared taxes across municipalities. The assessor, on the other hand, assesses each property to make sure that each property pays their fair share of tax on an individual level.
The estimated fair market value on the tax bill is a less reliable estimate than that prepared by the assessor. The DOR has never inspected any property in the County of Marathon. It is only to be used as a tool to check your assessment.
The important thing to point out is that ALL property had that same factor applied to it to determine its estimated fair market value--101.1%. Also, it is important that you know that it is the assessed value, in all cases, used to calculate your property taxes. If we used the "estimated fair market value" the taxes would not change. This is due to the fact that in order to meet the various budgets with a 1% lower tax base would require the rate to be increased by 1%; therefore, no tax change.
State law requires assessor's be within 10% (higher or lower) of the state's equalized value ratio at least once in every 4 year period. Marathon County is not, nor ever has been, out of compliance with this requirement. The Department of Revenue allows this leeway because appraisal is not an exact science, and to allow for the different standards used by them versus a municipality.
Remember, the "estimated fair market value" like the back of the tax bill states is an "estimate" and is only "approximate".
Q. I've been told that everybody's taxes go up after a revaluation. Is this true?
A. No, it is not. If the total levy remains the same, only those properties which are not presently paying their fair share will pay more taxes after a revaluation. Properties presently paying more than their fair share will pay less.
Q. How will my taxes change as a result of a new assessment?
A. Though the value of your property affects your share of taxes, the actual amount you pay is determined by the budget needs of the schools, city, county, technical college, and state reforestation. All of these taxing units decide what services they will provide in the coming year and how much money they will need to provide those services. Once this decision is made, a tax rate is adopted that will generate the needed dollars.
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