Real Estate Assessor's Office

Assessment Information

WHY DO WE HAVE A PROPERTY TAX?

Properties are appraised so that those of us who want the advantages of having schools, fire and police protection, and other public benefits, (which means just about all of us), can absorb our fair share of the cost, in proportion to the amount of money our individual properties are worth.

The real property tax is part of a well-balanced revenue system. It is more stable than sales or income taxes because it does not fluctuate as much when communities have recessions. When the community spends your tax dollars on better schools, parks, and so on, property values generally rise.

AUTHORITY GIVEN BY STATE TO CONDUCT REASSESSMENTS:

The Code of VA requires that all properties be assessed for taxation at 100% of market value. The same law requires Cities the size of Salem to assess properties on an annual or biannual. The City of Salem Council has decided that we will conduct a reassessment annually. During the reassessment cycle all property values are examined and adjustments made where necessary to guarantee that all property is assessed at market value. This is done to ensure that taxes are distributed equitably and uniformly.

WHAT IS THE DEFINITION OF MARKET VALUE?

Finding the market value of your property involves discovering the price most people would pay for it in its present condition. It's not really all that simple, however, because the assessor has to find what this value would be on every property in the City of Salem (over 10,000 parcels), no matter how big or small.

But the assessors job does not stop there. Each two year cycle it has to be done all over again, because the market value of almost everything changes from one year to the next.

The definition of market value as defined by the International Association of Assessing Officers is: The most probable sale price of a property in terms of money in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale, and assuming that the transaction is not affected by undue pressures.

HOW IS PROPERTY APPRAISED?

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 to replace it today, how much it takes to operate and keep it in repair, what rent it may earn, and many other dollar facts affecting its value, such as the current rate of interest charged for borrowing money to buy or build properties like yours.

Using these facts, the assessor can then go about finding the property's value in three different ways:

Sales Comparison Approach:

The first method compares your property to others that have sold recently. These prices, however, must be analyzed very carefully to get the true picture. One property may have sold for more than it's worth because the buyer is in a hurry and would pay any price. Another may have sold for less than it was actually worth because the owner needed cash right away and the property was sold to the first person who made an offer. When using the sales comparison approach, the assessor must always consider such overpricing and underpricing and analyze many sales to arrive at a fair valuation for your property. Size, time, quality, condition, location are also important factors to consider.

Cost Approach:

A second way to value your property is based on how much money it would take, at current material and labor costs, to replace your property with one similar. If your property is not new, the assessor must also estimate how much value has been lost to wear and tear or other factors such as obsolescence. The adjustment called depreciation, is then deducted from the replacement cost. Finally the assessor estimates the value of your lot and adds this to the depreciated cost to arrive at the total property value.

Income Approach:

The third way is to evaluate how much income your property would produce if it were rented as an apartment house, a store, or a factory etc.. The assessor must consider operating expenses, taxes, insurance, maintenance costs, and the return most people would expect on your kind of property. The net income from operation of the property is then capitalized into a value estimate by using a rate that provides a return on and of the property investment. This method is seldom used to appraise single family residential properties. The City of Salem uses this approach on income producing properties such as offices, shopping centers, apartments and like properties.

 WHY DO ASSESSED VALUES CHANGE EACH REASSESSMENT?

Property values can change for many reasons. The most obvious are changes to the property itself. For example. a bedroom, garage, swimming pool or other additions, or if the property is destroyed by flood or fire.

The most frequent cause of change in value is a change in the market. When market value changes, naturally so does assessed value. People make value by their transactions in the marketplace. It is important to note that the assessor does not create this value. The assessor simply has the legal responsibility to study those transactions and appraise your property accordingly.

HOW CAN A CHANGE BE MADE WITHOUT AN INTERIOR INSPECTION?

In order to make the most accurate assessment on a building, it is desirable to see the inside and outside of the property. The City of Salem keeps records on physical characteristics of each property. Even though the assessor may not have been able to got through your property, the assessment will still be reviewed, based on the existing records and sales of similar properties.

The City of Salem also mails all new property owners an information form to fill out when they have purchased a property to verify and update our computer records so that the most accurate data can be maintained.

DO YOU HAVE TO LET THE ASSESSOR IN WHEN AN INSPECTION IS REQUESTED?

No. However, when an interior inspection is not allowed, the assessor will attempt to update the records by looking at the outside of the property and using any other information available. To ensure an accurate assessment , it is to your advantage to allow the assessor inside your property if requested.

When reviewing properties in the City of Salem where the owner is not at home, the assessor will leave an information request on your door, if information is needed. You may then call back to the assessors office with the information.

HOW CAN MY ASSESSMENT CHANGE IF I HAVEN'T DONE ANYTHINGTO MY PROPERTY?

While improvements to property obviously bring changes in values, sometimes just general economic conditions can affect property values. Supply and demand and interest rates, inflation rates and changes in laws can influence the value of real estate. Those resulting value changes must be reflected in the assessments.

WHY DO SOME PROPERTIES INCREASE MORE THAN OTHER PROPERTIES?

There are differences between individual properties and between neighborhoods. One neighborhood may have sales that indicate a substantial increase in value, while sales in another may not reflect any change at all . Different types of properties within the same neighborhoods may also show different value changes. For example, one story houses may be in larger demand than two story houses, or vice versa. Older home values might rise slower than newer homes.

There are numerous factors to be considered by the assessor when reviewing property values, thus causing different areas and types of properties to change values at different rates.

IMPORTANT DATES TO REMEMBER:

January 1 - Effective Date of New Construction for half year

January 15 - Assessment Notices Mailed Out

January 31 - Hearings on Building Permit Assessments

February 6 - Deadline for Appeals to Real Estate Office

March - (various posted days) Meetings of Board of Equalization

June 5 - Real Estate Taxes Due for Second Half of Fiscal Year

July 1 - Effective Date of New Construction for Full Year

July 1 - Effective Date of the Land Book

July 31 - Hearings on Building Permit Assessments

December 5 - Real Estate Taxes Due for First Half of Fiscal Year