How is real property assessed?
Before assessing any parcel of property, the assessor estimates its market value. Market value is how much a property would sell for, in an open market, under normal conditions. To estimate market values, the assessor must be familiar with all aspects of the local real estate market.
A property's value can be estimated in three different ways:
- Market approach: The property is compared to others similar to it that have sold recently, using only sales where the buyer and seller both acted without undue pressure.
- Cost approach: Calculate what the property would cost, using today's labor and material prices, to replace the structure with a similar one. This method is used to value special purpose and utility properties.
- Rental Income approach: Analyze how much income a property, like an apartment building, a store, or a factory, will produce if rented. Operating expenses, insurance, maintenance costs, financing terms, and how much money owners expect to make on this type of property are considered.
Once the assessor estimates the market value of a property, its assessment is calculated. New York State law provides that all property within a municipality be assessed at a uniform percentage of market value.
The Town of Carmel since the 2017 reassessment project is currently at a uniform percent of 100%. The Town intends to maintain assessments at 100% full market value each year going forward.
Assessments are the basis to determining your property taxes so in keeping your assessments at fair market value insures that everyone pays his or her fair share of the tax levies.