An Overview
The Pima County Assessor's Office is responsible for locating, listing, and valuing all of the properties under its jurisdiction that are to be listed on the assessment rolls. This includes both real and personal property.
The Assessor does not create the value. People make the value by the decisions they make in the marketplace. The Assessor has the legal responsibility to study those transactions and appraise property accordingly: "Determine the full cash value of all such property as of January 1 of the next year by using the manuals furnished and procedures prescribed by the department [of revenue]." (A.R.S. § 42-13051)
Analyzing data, establishing values, issuing notices to owners, and providing for two appeal periods takes time. In fact, a given "assessment year" isn't a year at all. It is actually much longer—especially for residential values. To see year-specific valuation timelines, please visit the residential page and review the data under Notice Information.
As you can see in the valuation timeline diagram, the length of an "assessment year" isn't a year. From the beginning of the data collection to the mailing of tax bills is approximately four and a half years. (The length of the process is dictated by both Arizona Revised Statues and the Arizona Department of Revenue.)
Also notice that the bulk of the time is taken up with sales affidavit collection.
The prices paid for real estate that is sold reflect on the value of all the real estate in that area. Market fluctuations make the values go up and down. Usually, real estate tends to appreciate in value and that is why values usually go up each year. However, in a downturn, when the real estate market and full cash values are dropping, a frequent question is, why doesn't the full cash value on the valuation notice reflect recent real estate prices?
For just the assessment part, two and a half years are required for the collection of sales data. Then four more months of analysis for economic and neighborhood trends using a technique called Multiple Regression Analysis. Multiple regression explores and quantifies the relationship between known sales prices and property characteristics to predict a value. That value appears as the full cash value on the Notice of Valuation mailed each February.
Arizona is unique in that it uses two types of property values for taxing purposes. The aforementioned full cash value is the value placed on the property by the Assessor. The limited value is determined by applying a statutory formula for a specific tax year (A.R.S. § 42-13301 and A.R.S. § 42-13302). Limited value may increase by either 10% of the previous year's value, or 25% of the difference between the current year's secondary value and previous year's limited value, whichever is greater. In no event should the limited value exceed the full cash value.
It should be pointed out that the calculation of the limited value may raise the Limited value even though the full cash value decreases. The limited value rises each year until it equals the full cash value.
The assessed value is derived by multiplying the full cash value and the limited value by the assessment ratio. To calculate the tax, the assessed value divided by 100 and multiplied by the tax rate.
The assessed value derived from the limited value is the basis for computing primary taxes for the maintenance and operation of school districts, cities, community college districts, counties, and the state. The assessed value derived from the full cash value is the basis for computing secondary taxes for bonds, budget overrides, and special districts, such as fire, flood control, and other limited purpose districts.
The following seven steps describe the Assessment Process:
- Locate and identify all property in the county.
- List all properties, with a description of quantity, quality, and significant characteristics.
- Determine the full cash value of each taxable property.
- Calculate limited property value as defined by statute.
- Determine the taxability of each property by legal class.
- Calculate the assessed values as defined by statute.
- Maintain an up-to-date ownership list of all property.
- Notify property owners of the proposed full cash and limited property valuations.
- Maintain and apply exemption and senior property freeze applications.
- Prepare and convey the assessment roll to the board of supervisors.
More About Determining Full Cash Value
There are three methods of appraising or establishing the full cash value of property:
Market Approach
The Market Approach, also known as the sales comparison method, compares property to other similar properties that have sold. Our office uses the previous three years of sales for all properties that the sales comparison approach can be utilized. Recent market transactions are analyzed for a given location and then property values are determined, based on those transactions. Sales prices determine values for individual characteristics (like a pool or a garage), which are then applied to all of the properties in that particular area.
Cost Approach
When there are not enough sales for a type of property to be properly valued using the Market Approach, there is the Cost Approach. In this approach, the replacement cost (minus depreciation) is determined based on how much it would take at today's material and labor costs to replace the existing structure. Then the value of the land is added to arrive at the value for the property. Some properties are valued statutorily or overridden based on market sales; some are modeled.
Income Approach
For rental and leasing property, the Income Approach is sometimes used. This method utilizes the capitalization of the property's net income to determine its value.
For a more detailed explanation of the valuation of various types of property, please view the information for each type.
Assessment Ratio and Assessed Value
In addition to determining the value, the Assessor must identify the appropriate legal class to be applied to the property. The legal class ratios are used to calculate the assessed values of the property. The following are the most common legal classes, property uses, and their assessment ratios:
To calculate the Assessed Values:
Limited Assessed Value = Limited Value × Assessment Ratio
The Limited Assessed Value is used by the clerk of the board to calculate Primary Taxes. |
Assessed Value = Full Cash Value × Assessment Ratio
The Assessed Value is used by the clerk of the board to calculate Secondary Taxes. |
Notification and Appeals
The Assessor is required to notify the owner of record with a Notice of Valuation on or before March 1. This is sent via mail to the last known address. If the property owner feels that their property has been improperly valued or erroneously listed, they may petition the Assessor for review of the property. This must be done within 60 days of the notice date, found on the front of the notice. More information on this can be found on the Appeals Process page.
The Assessment Roll
Once a year, the Assessor prepares the assessment roll for conveyance to the board of supervisors. The board prepares the abstracts of value. These abstracts are sent to the various taxing jurisdictions. The finance departments of the jurisdictions use the abstracts (along with the jurisdiction's budget) to determine their tax rate.
On the third Monday in August, the board of supervisors approves the the tax rates sent from the taxing jurisdiction. Then the board orders the clerk to "extend" the roll, thus transforming the assessment roll into the tax roll. The tax roll will be used to create the tax bills. Afterward, the tax roll is conveyed to the treasurer for collection.
To recap:
The statutes and reference to the Arizona Constitution above are shown as examples of the points listed. To review all the laws and regulations governing the assessment process in detail, please consult: