| INTRODUCTION
The foundation for property taxation in Kentucky comes directly from
the Constitution of Kentucky (Sections 3, 170,171, and 172), which requires
that all property be taxed unless specifically exempted by the constitution.
The Constitution Further directs that all 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 real
property no less than once every four year.
MARKET
VALUE
Definition of Market Value: The most probable price which a property
should bring in a competitive and open market under all conditions requisite
to a fair sale, the buyer and seller, each acting prudently, knowledgeable
and assuming the price is not affected by undue stimulus. Implicit in this
definition is the consummation of a sale as of a specified date and the
passing of title from seller to buyer under conditions whereby: (1) buyer
and seller are typically motivated; (2) both parties are well informed
or well advised, and each action in what he considers his own best interest;
(3) a reasonable time is allowed for exposure in the open market; (4) payment
is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and (5) the price represents the normal consideration
for the property sold unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale. adjustments to
the comparables must be made for special or creative financing or sales
concessions. No adjustments are necessary for those costs which are normally
paid by sellers as a result of tradition or law in a market area; these
costs are readily identifiable since the seller pays these costs in virtually
all sales transactions. Special or creative financing adjustments can be
made to the comparable property by comparisons to financing terms offered
by a third party institutional lender that is not already involved in the
property or transaction. Any adjustment should not be calculated on a mechanical
dollar for dollar cost of the financing or concession but the dollar amount
of any adjustment should approximate the market's reaction to the financing
or concessions based on the appraiser's judgment. |
