The Boone County PVA is responsible for applying a fair and equitable assessment to about 2,500 commercial properties in Boone County as of January 1st of each year. Our office takes great pride in ensuring an accurate assessment is made for each commercial property. If you have any questions regarding the assessment of your property, please be sure to see the Frequently Asked Questions area.
The assessment of your property is based on the market value as of January 1 of each year. Market conditions as of January 1st dictate which properties will be reassessed for that year. The PVA gathers characteristics about each property, researches local sales as well as market income data, and utilizes several appraisal approaches to determine your property assessment.
The PVA relies on professional, well-trained Field Assessors to gather data necessary for accurate property assessments. On-site inspections occur when a building permit is issued, a sale is recorded, a property is damaged, or at the request of the property owner. All Field Assessors carry signed identification badges, wear shirts with the PVA logo and have the legal right to measure the exterior dimensions of a structure in the absence of the owner. While you are not required to let the Field Representative into your building, your cooperation helps assure that the assessment will be fair and based on complete and accurate information.
If you have a question about a Field Assessor, please call the PVA office at 859-334-2181.
In order to assess property at market value, the PVA utilizes a computer assisted mass appraisal system (CAMA) and considers all three approaches to value: the cost approach, the sales comparison approach, and the income approach. If assessments are significantly different than comparable sale prices, we will reassess to ensure that our assessments are in-line with sale prices. Land value is most frequently determined by the market comparison approach.
The cost approach is based on the principle of substitution: that a rational, informed purchaser would pay no more for a property than the cost of building a replacement with similar function. The cost approach seeks to determine the replacement cost new of an improvement, less depreciation, plus land value. Embedded in the CAMA software are cost tables from Marshall & Swift®, the industry leader in building cost guides. The result of using the cost approach ensures assessments are applied fairly and equitably to all properties. Even though all properties can be assessed using the cost approach, older properties are more difficult and are more subjective because depreciation for age, functional obsolescence, and economic obsolescence have to be estimated.
Sales Comparison Approach
The sales comparison approach is based on the concept of value in exchange. The sales approach to value compares the property value being appraised with similar sales of like properties. The characteristics of the comparable sales are analyzed for their similarity to those of subject. The prices of the comparable sales must be adjusted for any differences between the properties and the subject. Value indications derived from the sales comparison approach are usually considered particularly significant because they express the reactions of buyers and sellers in the real estate market. The sales approach is suitable when the same type of property is being exchanged periodically in the market.
The income approach is typically used in appraising income-producing properties. The investor who purchases an income producing property is essentially trading their present dollars for an income stream of future dollars plus the return of their initial investment. This approach best relies on the "economic value" of real estate with regard to investment decisions and desires for income flow from operation of the property. The process of converting a series of anticipated income into present value is capitalization; capitalization transforms net operating income produced by a property into the property value.