Ask the Mayor: What Does Assessed Value of Real Property Mean?

March 30, 2015, 1:08 PM HST · Updated April 6, 11:38 AM
0 Comments
×

Maui county logo. File image.

Maui county logo. File image.

The mayor answers questions from the public in this series.

By Mayor Alan Arakawa

Q: Why does there seem to be so little correlation between assessed values of real property and what people are asking? I looked at a website that showed asking prices and appraised values. Most properties seemed grossly undervalued. Wouldn’t more accurate appraisals substantially increase income to the county?

A: Asking prices are not used to value properties for tax assessment purposes, because they are not consummated sales and only reflect the price the seller desires. And typically, asking prices are higher than actual sales prices.

SPONSORED VIDEO

Another consideration is that higher values do not necessarily equate to more income for the County of Maui because taxes are composed of two parts: values, which are established annually and are certified on April 19, and tax rates, which are established by the County Council annually on or before June 20.

If you study the tax rate history of Maui County at www.realpropertyhonolulu.com under the “Reports” link, you will see that real property tax rates have fluctuated depending upon values and the financial needs of county government.

The 2015 assessed values that were recently mailed to Maui County property owners were derived using arm’s-length sales that recorded from July 1, 2013, through June 30, 2014, for a valuation date (for assessment purposes) of January 1, 2015.

This means that a lag of approximately 12 months occurs between the time the values are set and owners receive their bill on July 20. Much of this lag is necessary because it allows for an appeal period and for public input regarding tax rates in the county budget.

I would like to point out that our Real Property Assessment Division is tasked with complying with mass appraisal industry standards set by the International Association of Assessing Officers. After completing ratio studies comparing assessed values with the sales prices used for valuation purposes, our RPAD consistently passes with flying colors.

One study of 1,924 improved, single-family sales indicated an average assessment-to-sale price ratio of 98.89%.

Want to Ask the Mayor?

Submit your questions about County of Maui programs, services, operations or policies to Mayor Alan Arakawa via email at [email protected], by phone at 270-7855 or by mail to 200 S. High St., 9th Floor, Wailuku, HI 96793. Questions submitted will be considered for inclusion in the Ask the Mayor column.

ADVERTISEMENT

Print

Share this Article

BREAKING NEWS 
TEXT ALERTS
Sign up to receive important news alerts like tsunami warnings,
floods, traffic accidents, road closures and more.
Phone # (xxx-xxx-xxxx):
E-Mail:
 

    View Categories
    Promote Your Maui Business for Free Add Your Listing

    Weekly Newsletter

    ARTICLE COMMENTS ( 0 )
    This comments section is a public community forum for the purpose of free expression. Although Maui Now encourages respectful communication only, some content may be considered offensive. Please view at your own discretion.

    I Understand, Show Comments