- Assessment of Property
Assessment of Property
The Maine Constitution says that property shall be assessed at its "just value." The courts have interpreted "just value" to mean fair market value or in other words "what the property is worth."
A property's worth is commonly looked at as "what a willing buyer would pay a willing seller" for a particular piece of property.
Methods of Assessment
Determining the market value of property is no easy task. Local assessors use three basic methods to determine a property's worth:
- Comparing the selling prices of similar types of property
- Determining how much it would take at the current price of materials and labor to replace a building, then subtracting out how much the building has depreciated
- Evaluating how much income the property would produce if it were rented, like an apartment house, store or factory.
One, two, or all three of these methods might be used to help the assessor determine the fair market value of your property.
It is also important to note that land and buildings are valued separately. Therefore, a home with water frontage may be assessed at a significantly higher value, because of the land's value, than an identical home without water frontage.
To implement the constitutional requirement that real estate be assessed at its "just value," and in recognition of the tremendous difficulty and costs to a municipality to maintain a "just value" assessment, the Maine Legislature enacted assessing standards that municipalities must meet.
Examples of standards include:
- The total local valuation of property not fall below 70% of fair market value.
- The quality rating of assessments not exceed 20 (which basically means that the difference in valuation between similar properties should never be greater than 20%).
Revaluations are commonly used when a community falls below the assessing standards. During a revaluation, all property in the municipality is inspected and assessments are adjusted to their fair market value.
Taxable Property in Maine
The total value of taxable property in Maine is over $68 billion, which generates about $1.2 billion in property tax revenue to fund the operation of Maine's 492 cities, towns and plantations.