The Assessment Process
The foundation for property taxation in Kentucky comes directly from the Constitution of Kentucky (Section 3, 170, 171,
and 172), which requires that all property be taxed unless specifically exempted by the Constitution.
The Constitution further directs that taxable property must be assessed at its fair cash value, estimated at the price it
would bring at a fair voluntary sale.
The PVA is required by law to physically examine each parcel of taxable real property no less than once every four
What Is Market Value?
Finding the market value of your property involves discovering the price most people would pay for it in its present
condition. It is not quite that simple, though, because the PVA assessor has to find what this value would be for every
property, no matter how big or small. The PVA's job does not stop there. Each year it has to be done all over again,
because-as we all know-the market value of almost everything changes from one year to the next.
Why Have A Property Tax?
Properties are assessed so that those of us who want the advantages of having schools, fire and police protection, and
other public benefits (which means just about all of us), can absorb our fair share of the cost, in proportion to the
amount of money our individual properties are worth. The property tax is part of a well-balanced revenue system. It is a
more stable source of money than sales and income taxes because it does not fluctuate when communities have
recessions. When the community spends your tax dollars on better schools, parks, and so on, your property values
rise. Some of the windfall benefits your receive are recaptured by the property tax.
How Property is assessed
To find the value of any piece of property the PVA must first know what properties similar to it are selling for, what it
would cost to replace it, how much it takes to operate and keep it in repair, what rent it may earn, and many other dollar
facts affecting its value, such as the current rate of interest charged for borrowing the money to buy or build properties
Using this information, the PVA can then determine the property value using the three methods listed below:
Sales comparison approach:
The first method compares your property to like properties that have sold recently. These prices must be analyzed very
carefully to get the full picture. When using the sales comparison approach, the PVA must always analyze many sales
to arrive at a fair valuation for your property. Size, quality, condition, location, and time of sale are important factors to
A second method to value your property is based on how much money it would take, at current material and labor cost,
to replace your property with one similar. We would then minus depreciation and add the value of the land to determine
the current value.
The third method is to evaluate how much income your property would produce if it were rented as an apartment
house, a store, or a factory. The PVA must consider operating expenses, taxes, insurance, maintenance costs, and the
return most people would expect on your kind of property.
While all three methods may be used, more weight may be given to one method.
Assessed Values May Change From Year to Year.
When market value changes so does assessed value. The PVA office has not created the value. PEOPLE DETERMINE
VALUE by their transactions in the marketplace. The PVA office simply has the legal responsibility to study those
transactions and assess your property accordingly.
Assessed Value and the Tax Rate
The PVA office has nothing to do with the total amount of taxes collected. The PVA's primary responsibility is to find the
fair market value of your property, so that you may pay only your fair share of the taxes. The amount of tax you pay is
determined by a TAX RATE applied to your property's ASSESSED VALUE. The tax rate is determined by all the taxing
agencies-city or county, school districts, library, state and others. The PVA office also keeps track of ownership
changes, maintains maps of parcel boundaries, keeps descriptions of building and property characteristics up to date,
keeps track of individuals and properties eligible for exemptions and other forms of property tax relief, and most
importantly, analyzes trends in sales prices, construction costs, and rents to estimate the value of all assessable
Your Rights and Responsibilities
If your opinion of the value of your property differs from the PVA, you must have a conference with a member of the
You can help by providing accurate information such as one or more of the following:
Comparable sales information
Appraisal no older than 12 months
Replacement cost per insurance cost
Cost of new construction
Proof of Structural damage
Daviess County PVA