Valuation Methods Used by the DeKalb County Property Tax Assessors

Posted by Daniel Jones on Mar 30, 2020 11:20:00 AM

The law requires the Dekalb county property tax assessors to appraise real and tangible personal property at their fair market values. There are three approaches used in order to arrive at a fair assessment. Of the three methods, only one will be used depending on the availability and quality of market data resources.

DeKalb County Property Tax Assessors

Market Sales Comparison Approach

In the sales comparison approach, the Dekalb county property tax assessors use comparable sales to determine the value of your property. This approach is rarely used in mass appraisals because this can be a very difficult and hard to automate approach to use on every property in the county.

Cost Approach

This is the common approach used on residential properties. Data gathered will be entered into the Computer-Assisted Mass Appraisal (CAMA) system, such as the zoning information, restrictions on use and building characteristics.  An estimate of the cost, in today’s dollars, to replace the existing improvements with new improvements is generated. An estimate of the accrued depreciation of the subject property is deducted from this “replacement cost new”. To this an estimate of the land value is added, and the total is the appraised value. 

In the mass appraisal process, the value generated by the cost approach is often adjusted based on sales in the neighborhood. The cost values of properties that have sold are compared to their sale prices and judgments are made about the quality and level of assessments in the neighborhood. The goal of the DeKalb County property tax assessor is to ensure that the appraised values are within acceptable value ranges based on market activity. 

This type of approach is commonly used because it is relatively easy to automate and because most of the information necessary to generating fair market values can be readily obtained. But it can also be highly subjective, primarily because the estimated accrued depreciation on older properties creates a wide margin of error. 

Income Approach

In the income approach, the net operating income of an income-generating property is used to determine its fair market value.  Income and expense data will be analyzed in arriving at the net income that will be capitalized into an appraised value. Capitalization rates are taken from comparable sales and they can be estimated using other data from the market.

The income approach has application because market data is usually easily accessible for many types of income-generating properties. Many county assessors will survey commercial property owners seeking out rental rates and expense ratios. There are also publications that gather this information.

Since most CAMA systems are not equipped with the sophisticated ability to reconcile a single value estimate from several approaches, the DeKalb County property tax appraiser usually chooses one approach. The choice is made based on the credence placed on the appropriateness and sufficiency of the data gathered for analysis. 

You can question the appropriateness of the appraised value based on the approach used for its determination. For example, if your property was valued using the income approach you can argue the rental rate, expense ratio, and capitalization rate.  Your basis for appeal will usually be value and uniformity. For assistance, contact Fair Assessments, LLC today!

Topics: DeKalb County Property Tax Assessors

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