Property Taxes II

Before proceeding further it's time to understand some property tax terminology.

Market Value: The estimated sales value of the property. For purposes of real estate taxes, the county auditor determines the market value of all of the property in the county.

Taxable or Assessed Value: The taxable value is determined by taking 35% of the market value of the property. For example, a home that would have a market value of $100,000 would have a taxable value of $35,000.

Re-appraisal: Every six years the county auditor appraises all of the properties to determine their market value. This is re-appraisal. Every three years, the county auditor does an update of the market values based on records of home sales.

Mills: One mill cost a property owner $1.00 for every $1,000 of taxable value.

Inside Millage; See Part I

Outside/Voted Millage: Outside millage is any millage "outside" the 10 mills limit. This millage is voted in by the public.

Example for explanation purposes only: Wilmington City Council determines that the inside millage does not provide sufficient funds for adequate police force operations. Council requests that the county auditor determine the outside mills required to provide an annual revenue of $12,500.

The auditor notes that the total taxable value of the city tax district $10,000,000 and that a 1.25 (.00125) mill levy will provide the required revenue. City council then places a 1.25 tax levy on the ballot for the next election. The voters then decide the issue. Note for practical purposes the levy revenue can never exceed the initial amount voted on even if the total tax value of the taxi district increases.

This feature is explained by “Effective Millage”

Effective Millage: The millage rate that is actually levied on property. Once a levy is voted in, a tax district cannot collect any additional money due to valuation increases from reappraisal on that levy. As property values increase, the millage rate on that voted levy is decreased so that the levy generates the same amount of money. When total value increases the tax amount individual property owners pay is educed. On the other hand if taxable value decreases the levy millage can never exceed the voted amount.

A small amount of additional money on voted millage will be realized from new construction or annexation.

Paul Hunter paulhunter45177@gmail.com