Land Value - Annual Re-Valuation
The ADOR has no standards or guidelines for the Counties to determine land value. The Counties
are required to submit annual reports of land value, However the ADOR does not know how to read
these reports.
The change in the land value for my neighborhood has been 31% in 2005, 0% in 2006, 50% in
2007 and 0% in 2008. I wonder if this kind of dramatic change has more to do with appraisal
errors then market forces?
The new property valuations will be mailed for 2009, are based on sales from October 1, 2007
through September 30, 2008. Beginning in January 2009 the appraisal of improvements on these
sales are adjusted as required. This is done with no knowledge of the actual parcel condition at
time of sale. Next the county index or inflation factor is applied to the home's construction cost.
Then the new land value is computed. Land value changes can be the major source of property tax
increases.
Land value is determined by subtracting the value of improvements, such as buildings, from the
sales price for each parcel sold during the current year. (Land = Sale price – Improvements value).
I now find that the JCBOE can change land value based on "judgement" alone total ignoring
neighborhood sales.
How Land Value is computed
This new land value is then spread throughout the neighborhood. If any improvements are
understated, then land value will be inflated. This inflated land value is then spread through the
entire neighborhood.
Example of depreciation erroneously inflating land values
Examples of distorted land values
Things that tend to understate the value of improvements.
Adjustments to Land Value -Influence factors
AMM 5 Land
How to correct property value
The ADOR has no standards or guidelines for the Counties to determine land value. The Counties
are required to submit annual reports of land value, However the ADOR does not know how to read
these reports.
The change in the land value for my neighborhood has been 31% in 2005, 0% in 2006, 50% in
2007 and 0% in 2008. I wonder if this kind of dramatic change has more to do with appraisal
errors then market forces?
The new property valuations will be mailed for 2009, are based on sales from October 1, 2007
through September 30, 2008. Beginning in January 2009 the appraisal of improvements on these
sales are adjusted as required. This is done with no knowledge of the actual parcel condition at
time of sale. Next the county index or inflation factor is applied to the home's construction cost.
Then the new land value is computed. Land value changes can be the major source of property tax
increases.
Land value is determined by subtracting the value of improvements, such as buildings, from the
sales price for each parcel sold during the current year. (Land = Sale price – Improvements value).
I now find that the JCBOE can change land value based on "judgement" alone total ignoring
neighborhood sales.
How Land Value is computed
This new land value is then spread throughout the neighborhood. If any improvements are
understated, then land value will be inflated. This inflated land value is then spread through the
entire neighborhood.
Example of depreciation erroneously inflating land values
Examples of distorted land values
Things that tend to understate the value of improvements.
Adjustments to Land Value -Influence factors
AMM 5 Land
How to correct property value
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Alabama Property Tax Information
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