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Letters to the Editor

Faulty conclusion

May 10, 2007

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To the editor:

As a property tax hearing officer for the state of Kansas and an attorney who represents property owners in tax appeals, I wanted to comment on your May 7 article "Rental property valuations perplexing."

First, property in Kansas must be valued at its fair market value. Now, getting to this is an educated guess given all sales and the income the property generates. Looking only at percentage increases, however, from year to year largely misses the point. While a very large increase would certainly warrant examination, the bottom line is whether the county's value is what a willing buyer would pay a willing seller. Some properties go up faster during a given year because of a recent sale, or perhaps the appraiser is trying to catch up to the market.

Your statistical analysis belies your conclusion that larger apartment complexes are going up at a slower pace than smaller ones because four larger complexes increased more than 58 percent since 2005, and eight of the 10 listed had gone up by double-digit percentages since 2001. Not all properties appreciate at the same rate, and the appraiser's office is constantly trying to catch up to market data.

Jim Jesse,

Lawrence

Comments

75x55 6 years, 11 months ago

Not 'hmm', pelliott - just the government milking the cows. Never hear about property taxes valuations going down - wonder what Mr. Jesse can illuminate in that respect?

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pelliott 6 years, 11 months ago

The county started taxing me for my side yard as a buildable site. Quadrupling the amount, previously it was my side yard. They said that if I got a letter from the city saying it wasn't a buildable site, they would return the taxes to normal. The city said it was not a buildable site but would not issue a letter unless i formally applied for a building permit. Then if i would also have to asked for some sort of special request to build on a nonbuilding site. They explaned that one could request any property that was not a buildable site to be a building site, but they did not make the exceptions for building on a nonbuildable site but for special cases. I returned to the county and said the city would not give me a letter but did relate what the city had said. The county said that i would need a letter from the city. The city said the request for a building permit had to be a legitimate request.

hum.

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prioress 6 years, 11 months ago

The law is a good one; before the legislature forced this change, new owners/buyers were hit with a heavy load, and folks who had bought a house decades ago were paying a much lower rate. We all need to chip in and do our part.

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Reality_Check 6 years, 11 months ago

People need to understand that commercial property (incl. rental property with more than 4 units) is appraised differently than residential property (4 units or fewer). Commercial property is valued primarily by taking its income stream and applying a capitalization rate found from comparable sales. Thus, any increase in value of the property is based on increases in income. If rents have been flat, due to slow job growth or overbuilding, the property's value will remain realtively steady if the property is in the same condition as it was the previous year. If we know the rent growth and vacancy rates (which require taking surveys of property management firms), we can get a reasonable expectation of the value of the property.

Of course, the other way to value it is to examine its replacement cost and depreciate it, but this is less accurate.

Meanwhile, buildings with fewer than 5 units are value just like a house: based on comparable sales only.

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