According to the state law RCW 84.40.030, assessors are required to value all taxable property at 100% of its true and fair market value taking into consideration the highest and best use of the property.
Revaluation of real property is performed on an annual basis in Pierce County using current market value trends. All property is physically inspected at least once every six years (RCW 84.40.030 and 84.41.041). Revaluation is an additional aspect to the continuous appraisal of new construction, remodeling and other characteristic changes.
Real Property AssessmentPierce County appraisers take into consideration a wide range of factors to ensure accuracy and equity when estimating the assessed value of all types of property. Each of the three approaches to value has a distinctive method to measure and understand the motives of the buyers, sellers, investors, developers and financiers in the current market place. An appraiser determines value for residential properties by using either the cost or the market approach. The income approach is used primarily for commercial properties.
Approaches to Value
- Cost Approach: This method applies the principle of substitution. A knowledgeable individual would not pay more than the cost of a comparable property with similar location and utility. The appraiser estimates the cost new to replace or reproduce the improvements deducts from cost new, physical, functional and economic conditions that affect its value, adds the estimated land value to determine the total assessed value of the property.
- Market Approach: This method is a process of analyzing sales of similar properties that have recently sold. Adjustments are made for certain differences between the properties such as age, condition, area and amenities to determine the total assessed value.
- Income Approach: The income capitalization approach to value is used primarily for commercial properties. Value is based on the property's income generating potential. An analysis of income, vacancy, credit loss and operating expenses with an appropriate capitalization rate is necessary to properly determine a valuation by this method.
Personal Property Assessment
All personal property is subject to assessment and taxation except items exempted under RCW 84.36.005 and RCW 84.36.070. For the purposes of taxation, personal property falls into two categories, including tangible items which have physical existence. The chief characteristic is mobility, includes but is not limited to furniture, fixtures, machinery and equipment, supplies and materials which are not held for sale, leased equipment, certain leasehold improvements and lessee-owned improvements on public land. Intangible items consist of rights and privileges having a legal but not a physical existence. Intangibles are exempt per RCW 84.36.070.
Property owners are required to file an annual listing, or an affidavit, of all taxable personal property used in conducting their business by April 30. There is a penalty for failing to file a personal property affidavit, 5% of the tax due per month, up to a maximum penalty of 25%.
Taxes are a lien with reference to its value and ownership on the first day of January of the year in which the property is assessed. Property owners are required to file a separate affidavit for each place of business. Assessed values must be allocated to the taxing district in which the property is located. Affidavits are available by calling the Assessor-Treasurer's Office at (253) 798-7130.
Personal property values are based on reported cost, year of acquisition and type of asset. Valuation tables are provided by the Department of Revenue. These tables are used to determine the market value. Value change notices are mailed each year after the property has been assessed.