Ohio Administrative Code › Title 5703 - Department of Taxation › Chapter 5703-25 - Equalization - Appraisals › Section 5703-25-07 - Appraisals

Current through all regulations passed and filed through July 1, 2024
(A) Each general
			 reappraisal of real property in a county will be
			 initiated by an entry and order of the tax commissioner directed to the county
			 auditor of the county concerned which will specify the
			 time for beginning and completing the appraisal as provided by section
			 5715.34 of the Revised Code. In
			 January of each year the commissioner will adopt a
			 journal entry wherein is set forth the status of reappraisals in the various
			 counties and the tax year upon which the next reappraisal and the next
			 triennial update of real property values in each county
			 will be
			 completed.
(B) Each lot, tract, or
			 parcel of land, and all buildings, structures, fixtures, and improvements to
			 land will be appraised by the county auditor according to
			 true value in money, as it or they existed on tax lien date of the year in
			 which the property is appraised. It will be the duty
			 of the county auditor to so value and appraise the land and improvements to
			 land that when the two separate values for land and improvements are added
			 together, the resulting value indicates the true value in money of the entire
			 property.
(C) Land
			 will be
			 valued in accordance with the provision of rule
			 5703-25-11 of the Administrative
			 Code. All land will be valued according to its true value except
			 where the owner has filed an application under section
			 5713.31 of the Revised Code for
			 such land to be valued for real property tax purposes at the current value the
			 land has for agricultural use, and the land is qualified to be so valued and
			 taxed as provided in section
			 5713.30 of the Revised Code.
Buildings, structures, fixtures, and improvements to land
				will be
				valued in accordance with the provisions of rule
				5703-25-12 of the Administrative
				Code.
(D) In arriving at
			 the estimate of true value the county auditor may consider the use of any or
			 all of the recognized three approaches to value:
(1) The market data approach - The value of
			 the property is estimated on the basis of recent sales of comparable properties
			 in the market area after allowance for variation in features or conditions. The
			 use of the gross rent multiplier is an adaptation of the
			 market
			 approach useful in appraising rental properties such as apartments. This is
			 most applicable to the types of property that are sold often.
(2) The income approach - The value is
			 estimated by capitalizing the net income after expenses, including normal
			 vacancies and credit losses. While the contract rental or lease of a given
			 property is to be considered the current economic rent should be given weight.
			 Expenses should be examined for extraordinary items. In making appraisals by
			 the income approach for tax purposes in Ohio provision for expenses for real
			 property taxes should be made by calculating the effective tax rate in the
			 given tax district as defined in paragraph (E) of rule
			 5703-25-05 of the Administrative
			 Code, and adding the result to the basic interest and capitalization rate.
			 Interest and capitalization rates should be determined from market data
			 allowing for current returns on mortgages and equities. The income approach
			 should be used for any type of property where rental income or income
			 attributed to the real property is a major factor in determining value. The
			 value should consider both the value of the leased fee and the
			 leasehold.
(3) The cost approach -
			 The value is estimated by adding to the land value, as determined by the market
			 data or other approach, the depreciated cost of the improvements to land. In
			 some types of special purpose properties where there is a lack of comparable
			 sales or income information this is the only approach. Due to the difficulties
			 in estimating accrued depreciation, older or obsolete buildings value estimates
			 often vary from the market indications.