What determines value for tax purposes?

By law, your property is appraised at “fair market value” as it exists on January 1. The state’s definition: “Fair market value means the amount in terms of money that a well informed buyer is justified in paying and a well informed seller is justified in accepting for property in an open and competitive market, assuming that the parties are acting without undue compulsion.” However, sale price is not necessarily the same as market value.

The appraiser carefully examines all sales, qualifies the sales and adjusts them for special circumstances that might decrease or inflate prices. An owner in a hurry to sell might sell for less. If the seller includes substantial personal property in the sale or provides discounted financing the sale price is likely to be inflated. Comparable sales are recognized by courts as the best evidence of market value. Residential property owners who appeal successfully usually do so by finding comparable properties that have recently sold.