Your property is evaluated based on comparable properties that have recently sold, and adjusted for differences, such as a garage, finished basement, or better location. Where there are frequent sales and similarities in properties, this can be the most reliable approach for residential property. The assessor estimates potential gross income from rentals, then subtracts an amount for vacancies and operating expenses. The amount of net income is then converted to a value for the property, using a process called capitalization. All values are likely to change, but not all will change to the same extent.
Market values increase more in some neighborhoods than in others.
A major purpose of reassessment is to make sure that the new values reflect all changes that have occurred. Over time market value changes even if no improvements are made to the property. Many people sell their homes for much more than they paid for them years earlier. The statutes require that property be periodically reassessed to maintain realistic market values and treat all taxpayers fairly. The assessor is required by the statutes to notify the owner of record of any increase in the valuation of real property.