Property Tax 101
Property taxes in Kansas: How are they figured?
The basic rule is value is multiplied by the levy. The result is the tax to be paid.
Appraised Value
- All real estate and personal property are valued as of January 1. All property is valued by the County Appraiser.
- Real estate is valued by the Appraiser annually. If a building is partially complete at January 1, that part which is complete will be included in the property value for computing taxes.
- Laws on personal property require the holder of the property to notify the Appraiser annually what property is subject to tax. Failure to notify timely results in penalties, in addition to tax. If you own the personal property on January 1, you must pay the tax.
- A notice of value for all real property is sent by the Appraiser’s Office around the first of March each year. This notice will indicate how you may challenge that value. The first opportunity is called an informal hearing where the landowner meets with the Appraiser to discuss why the landowner and the Appraiser differ on the value of the property. If the landowner convinces the Appraiser that the property is over-valued, the Appraiser can reduce the value at that time. If the two cannot reach agreement, additional steps are available to the landowner prior to the taxes being billed.
- If you do not take advantage of the right to an Appeal Hearing, you still have an opportunity to challenge the value. When you get your bill, you can choose to pay the taxes under protest. A form is available for this procedure. Paying Under Protest requires that at least half of the taxes shown as due be paid. Once paid, the hearing will be held which may reduce the amount due for the second half. If the Payment Under Protest is not filed until taxes are paid in full, a refund will be issued if the value is reduced through the appeal.
- Notice that Payment Under Protest is an alternative to the original appeal. No taxpayer can undertake both an appeal hearing and a Payment Under Protest.
- You are urged to review the Appraiser’s web page for a more in-depth review of appeal options.
Assessed Value
- Once the Appraised Value is set, the Assessed Value is a mathematical calculation. Kansas Law offers a range of assessment rates. The key rates are shown to the right of this section:
- In other words, if you own a business property that has an appraised value of $1 million, the property will have an assessed value of $250,000.
- There is a partial exception to this simple calculation:
For residences, including mobile homes, the first $20,000 of Appraised Value is not subject to the school general levy. This makes residences have two assessed values for calculating taxes. The first is 11.5 percent of the total Appraised Value. The second is 11.5 percent of total Appraised Value reduced by $20,000. In other words, a $100,000 home will have an Assessed Value of $11,500 and a second Assessed Value of $9,200. This distinction will be important when calculating taxes.
Rate:
In Kansas, taxes are levied based on a mill rate, which can be calculated as Budget divided by Value.
Budget:
Each taxing entity in Kansas must adopt a budget no later than August 25. This budget will indicate the total amount of tax dollars required to pay the costs associated with each of the entity’s funds. For example, if a City General Fund will spend $10 million in 2009 and will receive revenues, including cash remaining from 2008, in the total amount of $4 million, that fund will need to raise $6 million in taxes.
All entities adopting budgets that levy taxes must publish their budgets and hold a public hearing before the August 25 deadline. The budget published then becomes the maximum budget for each published fund. The public hearing may lead the elected representatives of the entity to vote to lower the budget but they cannot increase it without first publishing and holding another hearing. The adopted budget is turned over to the County Clerk.
Value:
As described previously, the Office of the Appraiser calculates value on all property in the County. This value is separated into the various taxing entities to enable the calculation of a levy.
In September, the Appraiser will give the Clerk a report which indicates what the Assessed Valuation is (as of that date) in each of the taxing entity districts.
Also in September, the State will provide the Clerk with the total Assessed value, by district, of all property assessed by them. This includes railroads, utilities, and pipelines. The state appraises these properties to provide consistency across the state on these unique properties.
Rate:
At this point, the Clerk has accumulated the budget for each entity and the assessed valuation for each entity.
Calculating the rate is a mathematical exercise. As an example, let us say that the County budget indicates a need of $30 million with an assessed valuation of $1 billion. The formula of 30 million divided by 1 billion results in a value of 0.03. This means the rate is 3 cents per dollar of assessed valuation. For simplicity, Kansas requires a mill levy rate be stated in terms of dollars per thousand dollars of valuation. Therefore, the official levy rate, in the above example, is 30. That is a levy of $30 for every $1000 of assessed valuation.
Three levy rates are fixed by the State without regard to valuation. The state levies 1 mill for educational buildings and one-half mill for correctional buildings. They also levy 20 mills for schools. These three levies are the same in every county in the state. The first two were set by the legislature quite some time ago and are seldom discussed. The 20 mills school levy is discussed annually by the legislature.