Equalized Value? What's that?
Information provided by Accurate Appraisal
Equalized Value in Wisconsin represents the state’s effort to ensure fairness across all municipalities by adjusting for differences in how properties are taxed. It is important to understand how the state sets their values through equalized value and how local assessors set property value.
What is Equalized Value?
Equalized value is the estimate of total taxable property value in a municipality, as determined by the Wisconsin Department of Revenue (DOR). It accounts for variations across different municipalities to ensure that property values are consistent on a statewide basis. This value does not directly determine individual property taxes but plays a critical role in distributing shared revenue and tax levy funding.
How Assessors Set Values
Local assessors are responsible for setting the assessed value of each property based on market data, property characteristics, and recent sales within the municipality. Assessors use a mass appraisal approach that evaluates properties by comparing them to similar properties in the area, considering factors such as location, size, style, age, and condition. The assessor’s goal is to determine the fair market value for each property. Assessed values are updated during market updates, and not all municipalities in the state adjust values annually. During years of maintenance, values are not adjusted which requires the state to set equalized values to apportion taxes fairly throughout the state.
How the State Sets Equalized Value
The DOR annually reviews the sales of property provided by each municipality and adjusts them to reflect market conditions statewide. These adjustments are made to get a total value of each community using sales data, property trends, and other economic factors to determine what the values should be if all municipalities were assessing at 100% of market value. The state then applies this adjustment to determine each municipality's equalized value, which ensures that municipalities with different assessment levels are compared fairly.
Key Differences
- Local Assessments: Set by assessors using recent sales and property data, intended to reflect fair market value at the local level. (Based individual property value).
- Equalized Value: Adjusted by the state to account for discrepancies in how different municipalities assess property, ensuring consistent valuation standards statewide. (Based on all municipal property values as a total).
Why Equalized Value Matters
Equalized values are important because they are used to allocate state aid and determine levy limits, which directly impact property taxes. Even if your property’s assessed value remains unchanged, changes in the equalized value can influence your tax rate if your municipality’s overall community's value shifts compared to others.
For example, if your municipality’s assessed values are consistently lower than the market, the state’s equalized value may increase, affecting the distribution of shared revenue or tax funding and potentially leading to tax rate adjustments.
Impact on Property Owners
For individual property owners, equalized value helps create a more level playing field across the state by ensuring that municipalities are taxed proportionally based on a uniform standard. Although the equalized value doesn’t directly determine your specific property taxes, it influences how each taxing jurisdiction’s funds are distributed and helps ensure that each municipality is contributing its fair share.
As your assessor, we focus on determining market value within the community. The state uses equalized value to bring those local assessments in line with broader, statewide determination of fairness for tax purposes. This system helps balance out inconsistencies, promoting fairness and accuracy in how taxes are applied to all properties across Wisconsin.