Ohio Admin. Code 5703-25-05 - Definitions
As used in rules 5703-25-05 to 5703-25-17 of the Administrative Code:
(A) "True
value in money" or "true value" means one of the following:
(1) The fair market value or current market
value of property and is the price at which property should change hands on the
open market between a willing buyer and a willing seller, neither being under
any compulsion to buy or to sell and both having a knowledge of all the
relevant facts.
(2) The price at
which property did change hands under the conditions described in section
5713.03
of the Revised Code, within a reasonable length of time either before or after
the tax lien date, unless subsequent to the sale the property loses value due
to some casualty or an improvement is added to the
property.
(B) In
compliance with the provisions of sections
5713.01,
5713.03,
5715.01
and
5715.24
of the Revised Code, the "taxable value" of each parcel of real property and
the improvements thereon shall be thirty-five per cent of the "true value in
money" of said parcel as of tax lien date in the year in which the county's
sexennial reappraisal is or was to be effective beginning with the tax year
1978 and thereafter or in the third calendar year following the year in which a
sexennial reappraisal is completed beginning with the tax year 1978.
(C) "Computer assisted appraisal systems" - A
method in which the value of a property is derived by any or all of the
following computerized procedures:
(1)
Multiple regression analysis using sales to form the data base for valuation
models to be applied to similar properties within the county.
(2) Computerized cost approach using building
cost and other factors to value properties by the cost approach as defined in
this rule.
(3) Computerized market
data approach where a subject property is valued by adjusting comparable sales
to subject by adjustments based on regression or other analyses.
(4) Computerized income approach using
economic and income factors to estimate value of properties.
(5) Computerized market analysis to provide
trend factors used by appraisers as basis of market valuation.
(D) "Cost approach" - A method in
which the value of a property is derived by estimating the replacement or
reproduction cost of the improvements; deducting therefrom the estimated
physical depreciation and all forms of obsolescence if any; and then adding the
market value of the land. This approach is based upon the assumption that the
reproduction cost new normally sets the upper limit of building value provided
that the improvement represents the highest and best use of the land.
(E) "Effective tax rate" - Real property
taxes actually paid expressed as a percentage rate in terms of actual true or
market value rather than the statutory rate expressed as mills levied on
taxable or assessed value. In Ohio four factors must be considered in arriving
at the effective tax rate:
(1) The statutory
rate in mills;
(2) The composite
tax reduction factor as calculated and applied under section
319.301
of the Revised Code;
(3) The
percentage rollback prescribed by section
319.302
of the Revised Code;
(4) The
prescribed assessment level of thirty-five per cent of true or market
value.
(F) "Income
approach" - An appraisal technique in which the anticipated net income is
processed to indicate the capital amount of the investment which produces the
net income. The reliability of this technique is dependent upon four
conditions:
(1) The reasonableness of the
estimate of the anticipated net annual incomes;
(2) The duration of the net annual income,
usually the economic life of the building;
(3) The capitalization (discount)
rate;
(4) The method of conversion
(income to capital).
(G)
"Market data approach" - An appraisal technique in which the market value
estimate is predicated upon prices paid in actual market transactions and
current listings, the former fixing the lower limit of value in a static or
advancing market (price wise), and fixing the higher limit of value in a
declining market; and the latter fixing the higher limit in any market. It is a
process of correlation and analysis of similar recently sold properties. The
reliability of this technique is dependent upon:
(1) The degree of comparability of each
property with the property under appraisal;
(2) The time of sale;
(3) The verification of the sale
data;
(4) The absence of unusual
conditions affecting the sale.
(H) "Qualified project manager" has the same
meaning as division (A)(2) of section
5713.012
of the Revised Code.
(I)
"Replacement cost"
(1) The cost that would be
incurred in acquiring an equally desirable substitute property;
(2) The cost of reproduction new, on the
basis of current prices, of a property having a utility equivalent to the one
being appraised. It may or may not be the cost of a replica property;
(3) The cost of replacing unit parts of a
structure to maintain it in its highest economic operating condition.
Notes
Promulgated Under: 119
Statutory Authority: 5703.05
Rule Amplifies: 5713.01, 5715.01
Prior Effective Dates: 10/20/1981, 09/18/2003, 10/09/2014
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