City of Janesville wrapping up its first property revaluation in nine years

Print Print
Friday, June 3, 2011
— Janesville property owners will be paying closer attention to their mail in the coming weeks as the city wraps up its first property revaluation in nine years.

The city mailing will tell commercial and residential owners what their property was previously valued at and what its new value is.

People who have either sold their home or are trying to sell one know the recent economic downturn has deflated prices. Those property owners not in the real estate market will soon see what the city thinks their property is worth.

Municipalities periodically look at the assessed values of commercial and residential properties within their boundaries and reset them as close to fair market values as possible. Under state law, assessed values must be within 10 percent of fair market values, either above or below.

Janesville, however, has been outside of those parameters for several years, reaching a point in 2008 where its average assessed value was 79 percent of fair market value.

Therefore, the state’s Department of Revenue required the revaluation.

A painful result of the downturn has been an increase in the number of foreclosures, short sales and other real estate transfers made under duress.

For it’s revaluation, the city did not factor in duress sales, generally defined as one where either the buyer or the seller is forced into the sale.

Instead, it considered “arm’s length sales,” those that involved knowledgeable sellers and buyers, a property that had reasonable exposure in an open and competitive market and was consummated by payment in cash or conventional financing.

Jay Winzenz, assistant city manager, said including the duress sales is not allowed by state statute. Beyond that, he said, including those properties would artificially drag down all assessments.

That, he said, would likely mean an increase in property owners’ annual tax bills that are directly tied to the assessment.

By considering “arm’s length sales,” Winzenz said it’s likely that the combined value of all the properties in Janesville will increase.

But that doesn’t necessarily mean an individual property owner can expect an increase, he said.

Each year, the city sets its tax levy, the money it needs to fund certain operations from property taxes. That doesn’t change much.

The levy is then divided by the assessed value of the community to determine a tax rate.

Annual tax bills are the result of each property’s assessed value multiplied by the tax rate.

All things being equal, if the city’s overall value goes up, the tax rate goes down, and people’s taxes stay the same, Winzenz said.

For example, consider what would happen if the revaluation doubles the combined value of all community properties.

A property owner whose assessment doubles would pay the same in taxes.

If the assessment more than doubles, the owner would pay more in taxes. But if the valuation either decreases or increases by less than that of the combined community, an owner’s taxes would go down.

So, Winzenz said, it’s possible that a home’s assessed value could go up, but the owner would pay the same or less in property taxes.

If property owners want to discuss their revaluation, they should make an appointment to discuss their situation with assessors during the city’s open book process. Winzenz said that would be in either late June or early July and will be well publicized.

Last updated: 5:45 pm Thursday, December 13, 2012

Print Print