Taxable value

Taxable value - a part of property value, that is used to establish how much the owner of property is supposed to pay in taxes. The amount of taxable value can be found by getting in touch with the office of your territory's assessor. Taxable value, however, changes every year for each country. Goods that subject to taxable value include:

• the last taxable amount documented in the records tax authorities,
• in buildings backed by a finance lease, the value that results from a report of evaluation drawn up in accordance with valuation standards of property in force at the date of valuation,
• cost of the construction resulting from the act of transfer control of the buildings seized during the past fiscal year,
• value that results from an evaluation report drawn up by an authorized in accordance with valuation standards of goods in force at the valuation date,
• to constructions for which the tax is due the buildings, the amount stated in the accounts owner of the building and notified the concessionaire, renter, owner of the management or use, where applicable,
• the final value of construction works, new buildings constructed during the preceding fiscal year.

Determinating taxable value

Taxable value's increase depends on two factors: "the Consumer Price index and growth in properties that are taxable". One of methods to determinate taxable value is the method of capitalization of income. The method consist of; extracting many leases value that were charged by rents, then creating occupancy of action done by the company in one year, and finally deciding the amount of capitalization rate toward that company, for this form of wealth. This method however, is subjective, since it is hard to encounter, as standard says, a pair of equal constructions.

The difference between taxable value, market value and assessed value

Market value is "the most probable price" of a property, assessed value is the price ascertained for taxation purpose, taxable value is an activity which estimates the market value of an asset or group of assets or all tangible and intangible assets.

Footnotes

Taxable value — recommended articles

Amortization of intangible assets — Depreciation vs. amortization — Trade exchange — Gross revenue — Income Shifting — Effective gross income — Depreciation of fixed assets — Depreciation rate — Accounting Principles

References

• Bohan B., McCarthy F. (2013), Bohan and McCarthy: Capital Acquisitions Tax, Bloomsbury Professional
• Cîrciumaru D., Muntean N., Cârstina S.V. (2016), Importance of cost method in determining the taxable value, Young Economists Journal/Revista Tinerilor Economisti, Vol. 13 Issue 27, 2016
• Czurak D. (2010), Kent's taxable value likely to drop again, Grand Rapids Business Journal, Vol. 28 Issue 23, 2010
• Dye R.F., England R.W. (2010), Assessing the Theory and Practice of Land Value Taxation, Policy Focus Report, Lincoln Institute of Land Policy
• Kucharska-Stasiak E. (2018), 15 Myths about Market Value, Real Estate Management&Valuation, Vol. 26 Issue 3, 2018
• Property Values (2015), Center for Health, Environment & Justice FactPack - PUB 029, June 2015
• Understanding Your Assessment and Tax Calculation (2014), Anoka County Property Records and Taxation - Assessor's Office

Author: Bartłomiej Bargiel