Jefferson County Appraisal District

PROPERTY VALUE STUDY

Conducted by the Property Tax Division of the State Comptroller’s Office

Each year the Property Tax Division of the State Comptroller’s Office conducts a study to determine the market value of all taxable property within each school district and appraisal levels within each appraisal district. This study is basically a report card on how close to market value each appraisal district appraises the property within its jurisdiction. The school district study is of primary importance because the state’s distribution of several billion dollars in school aid depends in part on the Comptroller’s findings.

The appraisal district component of the study, commonly referred to as the "ratio study," provides each appraisal district with a measure of how well it applies appraisal techniques. The Comptroller’s field appraisers select sample properties and compare the appraisal district’s appraised value with the sales price of the same property. They calculate a ratio for each property in the sample by dividing the appraisal district’s appraised value by the sale price. For example, if the appraisal district appraises a piece of property at $50,000, and this same property recently sold for $55,000, then the appraisal district is appraising the property at 91 percent of market value ($50,000/$55,000). The Comptroller then finds the median, or middle, ratio for the properties sampled. If 3 properties are tested indicating ratios of 105%, 92%, and 90%, then the median ratio of appraisal is 92 percent.

If the appraisal district values are at a level either above or below what the Comptroller’s study reports as market value, this may be an indication that a reappraisal is necessary to get values closer to 100 percent of market value.

In the school district component of the study, the Comptroller’s field appraisers select sample properties as they do in the appraisal district ratio study, but they apply the mean, or average, ratio calculated in their sample to the appraisal district’s values. For example, based on the sales used in the sample for residential properties, the Comptroller’s Office calculates a mean ratio of 95 percent. If the appraisal district appraises all of the residential properties in "ABC" school district at $475,000,000, when the 95 percent ratio is applied, then the value for these same properties as determined by the Comptroller’s Office is $500,000,000 ($475,000,000/95%). If the appraisal district values fall within the confidence interval established by the Comptroller, then the appraisal district, or local, values are accepted by the State. This in essence means that the appraisal district appraised the property at 100 percent of market value.

The Comptroller’s Office has released the final results of its 2006 Property Value Study. The median level of appraisal for all properties tested in the Jefferson County Appraisal District was 98 percent. The Comptroller accepted the Appraisal District’s values for all school districts in Jefferson County, indicating that the sample properties were appraised at 100 percent of market value.

Click here to see the 2006 final results of the Property Value Study.