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Assessed Value Decreased, But Taxable Value Increased?
Often taxpayers ask why their taxable value continued to increase even though the assessed value decreased. This is the direct result of 1994?s ?Proposal A?. The taxable value continues to increase at the rate of inflation as measured by the Consumers Price Index (CPI) until it is equal to the SEV (State Equalized Value which is at 50% of ?usual selling price as equalized by the County and State). When the taxable value has a gap between the taxable and assessed values, the increase in taxable value occurs.
Just to remind you, the assessed value and SEV are to be no more than 50% of the ?usual selling price? of a property. The assessed values as determined by the Board of Review have been equalized at a 1.0000 factor for many years. This means that assessed and equalized values are the same.
The taxable value on which the tax bill is computed is annually limited in growth to the CPI unless there is an ownership transfer or changes are made to the property in the prior calendar year. Additions add to the taxable value above that of the Consumers Price Index.
If the reduction in assessed value had been the result of demolition or damage to the structure, then the taxable value would have been reduced proportionately.