What determines the taxable value (TV) of a property?

The taxable value (TV) of a property is determined by the lesser of Capped Value or State Equalized Value (SEV). This mechanism is designed to ensure that the increase in property taxes is controlled, particularly for properties that might see significant increases in market value.

Capped Value is derived from the previous year's taxable value, adjusted for inflation, and it limits the amount that the taxable value can increase in any given year. SEV, on the other hand, reflects the current assessed value of the property based on its fair market value. By selecting the lesser of the two, the assessment process ensures that taxpayers are protected from rapidly increasing taxes that could result from a sharp rise in property values while also adhering to state regulations.

This method thus promotes fair taxation practices and provides stability for property owners in fluctuating market conditions. When the SEV is higher than the Capped Value, it means that although the market has appreciated, the amount that can be taxed is limited to the Capped Value, fostering a more predictable financial environment for property owners.