PROPERTY TAX 101 PRESENTED BY: TORRANCE COUNTY ASSESSOR - BETTY CABBER HIDALGO COUNTY TREASURER - TYLER MASSEY

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1 PROPERTY TAX 101 PRESENTED BY: TORRANCE COUNTY ASSESSOR - BETTY CABBER HIDALGO COUNTY TREASURER - TYLER MASSEY

2 What does all of this mean!? ASSESSMENTS RESIDENTAL NON RESIDENTIAL PERSONAL PROPERTY PROTEST MILL RATES AD VALOREM VALUATION CYCLES & CAPS YIELD CONTROL 1% PROPERTY VALUATION MONTHLY TAX DISTRIBUTION NOTICE OF VALUATION

3 LET S BEGIN WITH THE BASICS

4 What exactly is property tax? Property tax is an ad valorem tax, which means that a tax levy is apportioned among taxpayers according to the value of each tax payer s property. The ad valorem tax system is based on the principle that the amount of tax paid should depend on the value of the property owned.

5 What is Taxable in New Mexico? These are just some examples: Land & All Improvements- This is an example of real property Personal Property includes- Livestock Cattle, Buffalo, Horses, Mules, Sheep, Goats, Swine, Ratites & other domestic animals useful to man Manufactured Homes Business Personal Property

6 The County Assessor classifies everything as either: Residential Non-Residential Means property consisting of one or more dwellings together with appurtenant structures, the land underlying both the dwellings and the appurtenant structures and a quantity of land reasonably necessary for parking and other uses that facilitate the use of the dwellings and appurtenant structures; as used in this subsection, "dwellings" includes both manufactured homes and other structures when used primarily for permanent human habitation, but the term does not include structures when used primarily for temporary or transient human habitation such as hotels, motels and similar structures means property that is not residential property

7 What are the duties of the County Assessor? The Assessor determines property value of homes, businesses, land, and other taxable property within the County for ad valorem tax purposes. The Assessor's office maintains current and correct ownership records of all property within the county. Personnel usually found in Assessors Office: Appraiser s GIS/ Rural Addresser Title examiner Deed clerk Document tech

8 What the assessor: DOES DO In general, the assessor is responsible for discovering, listing, and valuing all taxable property in their jurisdiction. The assessor must insure that all properties are assessed. Values must be fair and equitable. The assessor s office maintains all county parcel maps reflecting current ownership by accurately tracking all transfers, parcel splits, and subdivisions. DOES NOT DO The assessor does not create the value. Buyers and sellers create the values by their transaction in the market place. The assessor has the legal responsibility to study those transactions and to value the property fairly and equitably. The assessor does not determine taxes. This will be discussed more in depth later in the presentation.

9 Steps in Forming a Tax Bill (pg. 1) JAN Whatever is on New Mexico soil as of January 1 st is taxable. If property values change during the year, the changes in tax will not take effect until January 1 st of the following year FEB All changes to livestock & business personal property are required to be reported to the county assessor no later than the last day of February each year APR 1 st The County Assessor mails notices of value to property owners. Owner has thirty days from postmark date, to protest* * protest information will be covered later in this presentation

10 Steps in Forming a Tax Bill (pg. 2) JUNE 15 TH The total net taxable values in the county are certified by the county assessor and submitted to the NM Property Tax Division. JUNE 30 TH The NM Property Tax Division forwards the certified values to the Department of Finance and Administration for its use in making budgets and setting tax rates. SEPT 1 ST The NM Department of Finance and Administration sets the tax rates. The county commission certifies the tax rates. A copy of the written order imposing the tax rates shall be delivered to the County Assessor.

11 Steps in Forming a Tax Bill (pg. 3) OCT 1 ST By October 1, the County Assessor prepares the property tax schedule (tax roll) for the county and delivers it to the County Treasurer for billing. The tax roll lists every property, description, owner, address, value for property tax purposes, classification, exemptions allowed, applicable tax rates and tax amount NOV 1 ST Current year tax bills are mailed. Amounts are based on the values set by the assessors office. As per the law bills must be mailed no later than November 1st of each year NOV 10 TH The first half of the bill is due

12 What if the taxpayer does not agree with the assessed value? They may protest their value to the assessor within 30 days of the mailing date of the Notice of Value The assessors office is presumed correct according to the law. The property owner has the burden of proof to override the assessed value of his property. The owner may have an informal hearing with Assessor and/or appear formally to the local protest board, who will hear the protest and make a decision. This board is recommended by the assessor to the board of county commissioners, who formally appoints the members. If property owner does not agree with the protest board decision, OR they did not file a protest by the deadline, they may bring action in District Court Owner has to pay first half of tax bill no later than January 10 th at which point, they then can appeal to District Court. By filing a claim of refund. it is important to note, that the claim of refund ONLY applies to the current year taxes.

13 What are the duties of the county treasurer pertaining to property tax? On or before October 1st of every year the treasurer receives the tax schedule from the county assessor. The county treasurer prepares the tax bills. Tax bills are then mailed out on or before November 1st of every year. The county treasurer is responsible for collecting what was billed. The treasurer distributes the receipts collected from property taxes monthly to each governmental unit. The treasurer is responsible for submitting a yearly list, to the NM Property Tax Division Delinquent Tax Bureau, of all real property whose taxes are more than two years delinquent as of July 1st of each year. The treasurer is responsible for placing a lien on all delinquent manufactured homes within the county. The treasurer is responsible for the collection of delinquent taxes of personal property through various collection methods.

14 What the treasurer: DOES DO Protect the governmental units in which they collect for Collect & Distribute Report CAN DO Allow payment plans Outreach Online/ phone payments E-Billing DOES NOT DO The treasurer does not determine the value The treasurer can not lower the taxes The treasurer can not remove interest and penalty or any other fees The treasurer can not apply exemptions

15 Monthly tax distribution The county treasurer s office collects property taxes daily The treasurer s office at the end of each month runs a report that compiles what was collected throughout the month. This same report also reflects what will be distributed to each of the taxing authorities. The amount collected in any month is distributed the following month. The checks that are issued to the taxing authority are issued from the treasurer s office.

16 Delinquent Tax Sale REAL PROPERTY: SALE IS HANDLED THROUGH PROPERTY TAX DIVISION Properties sold are those that have not been paid within three years from the delinquency date Property is sold in public auction for the total amount of taxes, interest, penalty, & costs due. PERSONAL PROPERTY: SALE IS HANDLED THROUGH COUNTY TREASURER Personal property if not paid, may be seized and sold under the authority of a demand warrant Personal property is sold in public auction for the total amount of taxes, interest, penalty, & any expenses of the sale.

17 The 411 on mill levies The mill levy is the tax rate that is applied to the net taxable value of a property. The New Mexico Constitution limits rates that may be imposed without voter approval up to a total of 20 Mills. The following rates are authorized for general purpose: Counties- $11.85 for each $1000 of net taxable value Municipalities-$7.65 for each $1000 of net taxable value School District- $.50 for each $1000 of net taxable value The rates that are listed above total to the 20 Mills authorized. **Additional property tax mills will be discussed later**

18 Mill levies continued.. Changes to imposed mill levy: Requires a governing body approved resolution no later than June 1st. Resolution could be to impose an additional mill levy (if not already at the statutory maximum) or to decrease the currently imposed mill levy. Newly imposed general purpose mill levy is not subject to yield control the first year of imposition.

WHAT IS YIELD CONTROL "Estimated" property tax revenue for RESIDENTIAL property: (A) Calculation of Prior Year Property Tax Effort: Prior Year Rate Divided by 1000 0.

19 WHAT IS YIELD CONTROL "Estimated" property tax revenue for RESIDENTIAL property: (A) Calculation of Prior Year Property Tax Effort: Prior Year Rate Divided by X Total Prior Year Base Valuation $10,140,638 = Prior Year Property Tax Effort $25,737 (B) Calculation of Growth Factor "G": Total Previous Year Base $10,140,638 + Total Current Year Net New Valuation $0 = Base + New $10,140,638 / Total Previous Year Base $10,140,638 = Growth Attributed to New Construction Inflation Factor = Construction Growth + Inflation Factor = Growth Factor "G"* *"G" will at least be equal to inflation factor. (C) Calculation of Yield Control Rate: Prior Year Property Tax Effort (A) $25,737 X Growth Factor "G" = Current Year Property Tax Effort $25,904 / Total Current Year Valuation $10,287,309 = Yield Control (YC) Computed Rate (D) Calculation of Current Year Rate: Current Imposed Oper. Rate Versus YC Computed Rate X 1, = Current Year Rate (lower rate) Newly Imposed Additional Rate by Governing Body = Current Year Rate (E.1) Calculation of Estimated Current Year Property Tax Revenue: Current Year Rate (lower rate) X Total Current Year Valuation Div by 1000 $10,287 = Estimated 100% Collection $25,904 X County Property Tax Collection Rate 95.02% = PT Revenue Based on Existing Rate $24,614 (E.2) Calculation of Additional Property Tax Revenue: Newly Imposed Additional Rate by Governing Body X Total Current Year Valuation Div by 1000 $10,287 = Estimated 100% Collection $45,521 X County Property Tax Collection Rate 95.02% = PT Revenue Based on Additional Rate $43,253 (E.3) Estimated Property Tax Rev. w/incr. $67,867 (E.4) Calculation of Property Tax Revenue as a Result of a Reduction to the Imposed Rate by Governing Body: Reduction to Imposed Rate by Governing Body X Total Current Year Valuation Div by 1000 $10,287 = Estimated 100% Collection $0 X County Property Tax Collection Rate 95.02% = PT Revenue Based on Reduction $0 (E.5) Estimated Property Tax Rev. After Reduction $24,614 This is an example of what estimating taxes looks like when using yield control MAKE SENSE?!

20 Learning to crawl Taxable Value Tax Rate $

21 Baby steps of property tax Total County Value based on: Tax rates used for: Dwellings General Purpose Manufactured homes General Operations

22 Walking on our own Total county valuation Tax rates

23 Running in circles lost and confused Total county valuation Tax rates New construction Yield Control Existing dwellings & Manuf. homes Increased need for services

24 Yield Control What is the purpose of yield control The intent of the statute is to prevent extraordinary tax increases in response to property reassessment, As valuations increase/decrease, the rate adjusts to limit tax increase/decrease to approximately the rate of inflation and growth attributed to new construction, The formula is applied separately to residential and non- residential properties. Technical Mumbo Jumbo Applies to operational rates imposed under Section Applies to other operational rates and other authorized rates unless the statutory language for a particular levy specifically excludes the application of yield control, Doesn't apply to general obligation debt mill levy rates.

25 Property Tax Rates Subject to Yield Control Municipal Flood Control- 5 mill maximum to construct dikes, dams, etc. Municipal Parking District- 6 mill maximum Special Hospital District mill maximum County Hospitals- operating and maintaining mill maximum County Hospitals to 6.50 mill depending on county class County Flood Control- 1.5 mill maximum Community Service District- 10 mill maximum Small Counties Assistance mill maximum Economic Advancement Districts- 2 mill maximum Low-Income Property Tax Rebate- County Option- 1 mill maximum College District Operation- 5 mill maximum Public School Capital Improvements- 2 mill maximum Public School Buildings- 10 mill maximum Flood Control Districts- 2 mill maximum County Operating Rates mill maximum Municipal Operating Rates mill maximum School District Operating Rates-.5 mill maximum Copper Ad Valorem Tax Soil and Watershed Conservation Districts Solid Waste Authority County Boards of Horticultural Commissioners Livestock Code

26 CONTACT INFORMATION BETTY CABBER TORRANCE COUNTY ASSESSOR Office: (505) TYLER MASSEY HIDALGO COUNTY TREASURER Office: (575)

2009 Reassessment As Impacted by Senate Bill 711

Saint Louis County 2009 Reassessment As Impacted by Senate Bill 711 Impacts of SB711 on the 2009 Reassessment Plan The County must notify property owners of changes in the projected tax liability resulting