Glossary

Glossary of Terms

Ad Valorem Tax

A tax levied in proportion to the value of the thing(s) being taxed. Exclusive of exemptions, use-value assessment laws, and the like, the property tax is an ad valorem tax.

Apartments

All apartment buildings with four or more units.

Appeal

The formal or informal process by which a property owner contests an assessment.

Appraisal

An estimate or opinion of value. The act or process of estimating value. The resulting opinion of value derived from the appraisal may be informal (transmitted orally) or formal (presented in written form). An appraisal is usually a written statement setting forth an opinion of the value of an adequately described property as of a specified date, supported by the presentation and analysis of relevant data.

Appreciation

Increase in value of a property, in terms of money, from all causes. For example, a farm may appreciate if a shopping center is built nearby, and property of any sort may appreciate as a result of inflation.

Assessment Roll

The basis on which the property tax levy is allocated among the property owners in a jurisdiction with taxing powers.

Assessed Value

The value assigned to taxable property by the assessor for purposes of property taxation. The Code of Virginia requires all assessments to be at 100% of market value.

Assessment Year

The 365 days beginning with the appraisal date. In the city of Roanoke, the assessment year begins on July 1 and ends on June 30.

Assessor

The head of an assessment jurisdiction. In the city of Roanoke, the assessor is called the Director of Real Estate Valuation.

Commercial/Industrial Use Class

The commercial/industrial use class consists of properties where the predominant use is the selling of merchandise or a service, or the assembly, processing, and manufacturing of products. This class also includes office buildings and vacant land where the most likely use would be commercial.

Computer Assisted Mass Appraisal (CAMA)

A system of appraising property, usually only certain types of real property, incorporating statistical analysis, such as multiple regression analysis and adaptive estimation procedure, to assist the appraiser in estimating value.

Condominium

A form of ownership of separate units or portions of multi-unit buildings providing for formal filing and recording of a divided interest in certain real property, and an undivided interest in common areas.

Cost Approach

One of the three approaches to value, the cost approach is based on the principle of substitution -- a rational, informed purchaser would pay no more for a property than the cost of building an acceptable substitute with like utility. The cost approach seeks to determine the replacement cost of an improvement less depreciation plus land value.

Date of Sale

The date on which the sale was agreed. The sale date represented in the city of Roanoke’s real estate files is the date of the deed.

Deed Book and Page Number / Instrument Number

A means (usually numeric) of identifying and accounting for each property transfer of ownership. The properties are referenced by grantor and grantee names, and include legal description, sale price and date of transfer. Since July 1997, the city of Roanoke has used instrument numbers to reference transfer of ownership.

Easement

A right held by one party to use the land of another for a specific purpose, such as access to other property.

Equalization

The process by which an appropriate governmental body attempts to ensure property under its jurisdiction is appraised equitably at market value or as otherwise required by law.

Exempt Use Class

Properties granted tax exemptions for religious, charitable, non-profit, educational or governmental use. Only exemptions specifically permitted by state law are granted.

Fixture

An item of equipment, because of the way it is used, the way it is attached, or both, has become an integral part of a building or other improvement. For example, a tub fixture becomes real estate once it is installed in a property.

Income Approach

That procedure in appraisal analysis which converts anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The income approach is widely applied in appraising income-producing properties. Anticipated future income and /or reversions are discounted to a present worth figure through a capitalization process.

Instrument

A formal legal document such as a deed, contract, will or lease.

Legal Description

A statement in words or codes identifying land for all purposes of law.

Market Value

The amount a typical, well-informed purchaser would be willing to pay for a property. For a sale to represent market value, the seller must be willing (but not under pressure) to sell and the buyer must be willing (but not under any obligation) to buy. The property must be on the market for a reasonable length of time, the payment must be in cash or its equivalent, the financing must be typical for that type of property and the transaction must not be affected by any undue pressures.

Mass Appraisal

The process of valuing a group of properties as of a given date, using standard methods and allowing for statistical testing.

Multifamily Use Class

All residential properties containing two or more dwelling units.

Neighborhood

The environment of a subject property having a direct and immediate effect on value. A geographic area (in which there are typically fewer than several thousand properties) defined for some useful purpose, such as to ensure for later multiple regression modeling the properties are homogeneous and share important locational characteristics.

Official Tax Map Number

The number assigned to each property in the city of Roanoke for identification purposes.

Parcel I.D. Number

A code, usually numerical, representing a specific land parcel’s legal description.

Personal Property

All property, other than real property. Personal property is not permanently attached and is, therefore, movable.

Real Property

The rights to land and improvements to the land.

Residential Use Class

The residential use class of property includes all property for use predominantly for living purposes. This class also includes vacant land where the most likely use would be residential development. Hotels, motels, and resorts are classified as commercial property.

Sale Price

The price for which a property was sold.

Sales Comparison Approach

One of the three approaches to value. That approach in appraisal analysis which is based on the proposition an informed purchaser would pay no more for a property than the cost of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data which can be verified from authoritative sources.

Sale Ratio

The ratio of an appraised (or assessed) value to the sale price of a property expressed as a percentage of the sale price.



         Assessed Value                         $69,000 AV

Sale Ratio = ----------------       Example:  92% = --------------

                      Sale Price                            $75,000 SP

Tax Base

The total assessed value of all the properties in the city of Roanoke subject to local property taxes.

Tax Exemption

Total exemption or freedom from tax such as is granted educational, charitable, religious and similar non-profit organizations. Exemptions may also be partial, such as tax exemptions permitted by enterprise zone and rehabilitation programs, and the elderly/disabled tax freeze.

Tax Levy

In terms of property taxes, the total revenue to be generated by the tax.

Tax rate

The tax levy divided by the tax base. It is often expressed in terms of dollars per thousand. The tax rate is multiplied by the assessed value to determine the amount of tax each property must pay.



         Total Tax Levy                               $40,000,000

Tax Rate = ----------------         Example:  $1.22 = ----------------

                  Tax Base                                $3,278,688,500

Use Class

One of the following classes of property: Single Family Residential, Multifamily Residential, Commercial/Industrial, Vacant Land, Exempt.

Uniformity

The

Constitution of Virginia

demands all property within the municipality be taxed at the same tax rate. The

Code of Virginia

demands the valuation be based on market value.

Vacant Land Use Class

Unimproved land with no buildings or structures.

Definitions adapted from:
Real Estate Appraisal Terminology , revised edition, compiled and edited by Bryl N. Boyce,Ph.D.,SRPA
Property Appraisal and Assessment Administration, general editor Joseph K. Eckert, Ph.D.