What is Revaluation?
A revaluation is a municipality-wide complete and thorough review of all assessments. During a revaluation, the Assessor attempts to physically inspect all properties and review all assessments. Value adjustments are made where necessary to guarantee that all property is assessed at market value. This is done to assure that taxes are distributed equitable and uniformly.
Why would a Revaluation be necessary?
Beginning in 1986, the Department of Revenue (DOR) requires that all property be assessed at or near 100% of the fair market value. The DOR requires that the assessed value of a taxation district must be established within 10% of the full value at least once during the four year period consisting of the current year and the three preceding years.
The law states that if taxation districts have not met this requirement the DOR will notify the taxation district in writing that they are not in compliance and give the district one year to meet market value (± 10%) requirement. A municipality-wide revaluation is usually then completed to meet that requirement.
What is the difference between reassessment, revaluation and a supervised assessment?
The term “reassessment,” as used in Section 70.75 of the statutes, means to completely redo the assessment roll. After receiving a petition, the Department of Revenue may order a reassessment of all or any part of the taxable property in a municipality, it its investigation determines that the assessments are not in compliance with the law. One or more persons would be appointed by the Department to prepare a new assessment roll. The assessment roll, after completion by the appointed person(s), is substituted for the original assessment roll. The municipality pays all expenses connected with a reassessment.
A “revaluation” occurs when the Assessor completes a comprehensive review of all assessments to insure that they reflect current market value and that they are equitable within and between classes of property (residential, commercial, agricultural, etc.). A revaluation may also be completed in response to a Section 70.75 review, which then involves the hiring of expert help by a municipality to aid the Assessor in making new, equitable assessments. The previous year’s assessment roll is not affected. Under Section 70.055 of the statutes, the governing body of a municipality determines that it is in the public interest to employ expert help to aid in making a new assessment. The local Assessor is not relieved o any responsibility of the office under this type of revaluation. The expert help and the Assessor act together as an assessment board in exercising the powers and duties of the Assessor during the expert’s employment.
A “supervised assessment” is an alternative to a reassessment. As provided in Section 70.75(3) of the statutes, one or more persons are appointed by the Department of Revenue to assist the Assessor in making the assessment for the following year. The Department supervises the assessment work. The municipality pays all costs involved in a supervised assessment. A supervised assessment is very similar to a revaluation under Section 70.055 in that new assessment records and assessed values are created. The previous year’s assessment roll is not affected.
Revaluations are expensive. Are they really necessary?
A complete revaluation of all taxable real and personal property within a municipality is periodically necessary. There may be several reasons for this: (1) state law requires that property assessments must be periodically recalculated so that at least once in every 5 year period the assessments are within 10% of true market value; (2) the current assessment may not have been made in substantial compliance with the law; (3) inequities may exist within classes of property; (4) inequities may exist between classes of property; (5) the governing body may desire an updating of records to show the physical characteristics of all its taxable real and personal property or (6) a governing body may desire an original inventory of all its taxable property. When inequities happen, some property owners are paying more than their fair share of the property taxes and some are paying less. A complete reassessment or revaluation may be the only remedy. Most property owners are willing to pay the expenses of a revaluation to be assured that all are paying their fair share of property taxes. Regardless of any equity issues, state law regarding the ratio of assessment to market value will generally require that a community revalue at least once every 5-7 years.
How are the equalized values used?
The equalized values are used by the taxing jurisdictions (i.e., school districts, counties, state, etc.) to apportion their tax levies (budgets) among municipalities. “Apportioning” is the process of dividing the tax levies for each taxing jurisdiction among all of the properties in the jurisdiction, based upon the total value of each district. A state levy, for example, would be apportioned among all of the properties in the state; an individual county’s levy among all of the properties in the county; and a school levy among all of the properties in the school district. Equalization is required to compensate for the fact that at any point in time, different municipal jurisdictions assessment ratios are not all at 100% of market value. Equalization adjusts all property values to 100% in order to equally distribute the overlying property taxes fairly to each property owner. Example: If the Municipality of Janesville’s assessment ratio is 89%, the Municipality of Beloit’s is 93% and village of Clinton’s is 77%, then the total value of each of those communities taxable property must be adjusted to 100% so that the County portion of the property tax is equally distributed. Otherwise, the portion of the county tax paid by each property owner would be unequally distributed.
Does each municipality make its own property tax laws?
No. Article VIII of the State Constitution requires that the taxation of property shall be uniform. Therefore, the state legislature enacts all the laws pertaining to property tax assessments and tax collection. Laws regarding exemptions for the general property tax are also exclusively determined by the state legislature. The state property tax assessment laws are covered in Chapter 70 of the Wisconsin Statutes.
I’ve been told that everybody’s taxes go up after a revaluation. Is this true?
No, it is not. If the total levy remains the same, only those properties that are not presently paying their fair share of the tax burden will pay more taxes after a revaluation. Properties presently paying more than their fair share will pay less.