New Construction Recommendation Examples

The published assessment practices survey report may include recommendations for improvement to the Assessor's procedures and practices. Below are examples of recommendations for the New Construction survey topic.

Enroll all assessable new construction.

Section 155.20(e) provides that a county board of supervisors does not have the authority to exempt new construction from property taxation, unless the new total base year value of the property, including the new construction, is $10,000 or less. Therefore, when part of a larger structure, low value new construction should be valued and enrolled.

The Assessor's practice of not enrolling all assessable new construction may result in escaped assessments of certain low-value projects and cause unequal treatment of taxpayers.

Enroll construction in progress at its fair market value for each lien date.

Section 71 requires the Assessor to enroll construction in progress at its fair market value. The Assessor must determine the completion status of new construction on each lien date and attribute a value based upon the percent complete. On subsequent lien dates, if the new construction is still incomplete, the Assessor must enroll the construction in progress at its fair market value. This process continues until the new construction is complete, at which time the new construction is assessed at its fair market value and a base year value is assigned. Section 71 further provides that new construction in progress does not acquire a base year value on each lien date. Thus, only after the new construction is complete and a base year value assigned is it subject to the annual inflation factor.

The Assessor's failure to assess construction in progress at fair market value on the lien date is contrary to statutory provisions and may allow construction in progress to escape assessment, causing a loss in revenue and inaccurate assessments.