Current through March 20, 2024
005.01 The assessor
shall annually use comparable sales from within the influenced area or other
areas of similar influence to determine the actual value of the agricultural
land and horticultural land in the area.
005.01A Actual valuation of agricultural land
and horticultural land shall be based on a market analysis of arms length
transactions that may include property that sold subject to certain probable
and legal purposes and uses. For the purposes of these regulations, probable
and legal uses shall mean those which are immediately feasible, and permitted
by current zoning or other statutorily permitted uses. The actual value may
additionally be influenced by other probable uses that are not yet feasible or
legal under current zoning. These include, but are not limited to use of the
land for residential (homesite) purposes, use of the land for commercial use
purposes, use of the land for industrial use purposes, or use of the land for
recreational use purposes.
005.02 The assessor shall annually determine
the special valuation assessment. The information shall be based upon sales of
similar classes or subclasses of agricultural land and horticultural land from
agricultural and horticultural areas in which actual value is not subject to
influences by other purposes and uses.
Sales within the same county that, in the judgment of the
assessor, do not have nonagricultural or nonhorticultural influences on the
value of agricultural or horticultural land, may be used for market comparison
in determining the special valuation assessment. Care should be taken to ensure
that the uninfluenced sales represent land that is comparable to the land to
which the special valuation assessment is being applied.
005.02A Sales in neighboring counties shall
be used in the market comparison approach if all agricultural and horticultural
sales within the county have been determined to reflect selling prices that
have been influenced by other than agricultural and horticultural purposes and
uses.
005.02B Special valuation of
agricultural and horticultural land shall be based on a market analysis of arms
length sales that may include property that sold subject to certain probable
and legal agricultural and horticultural purposes and uses. These include, but
are not limited to:
005.02B(1) Additions to
existing land holdings;
005.02B(2)
Like-kind exchanges (1031 Exchanges);
005.02B(3) Location to existing towns or
other locations of marketing influences such as grain elevators, grain
processors, feedlots, livestock sale barns, livestock buying stations, packing
plants, fertilizer dealers, fuel sales, feed supplement sales, and other
suppliers of purchased inputs used in farming and ranching;
005.03 The assessor
shall capitalize net cash rent to determine a valuation based on the earnings
of the property from the agricultural or horticultural use only. The valuation
indicated by such an income capitalization approach shall be used as the
special valuation if the market comparison approach results in a value that
reflects a value influenced by purposes and uses other than agricultural or
horticultural. Where the differences between the market comparison approach and
income capitalization approach is more than a mere difference of opinion the
assessor must determine which value most accurately reflects the property's
value for agricultural or horticultural purposes.
005.03A The income estimate shall be based
upon;
005.03A(1) Typical cash rent for the
land capability group observed for the parcel of land;
005.03A(2) Typical crop-share rental income
based on a typical crop rotation observed for similar land in the county or
land manual area including government program payments received. In accounting
for government program payments in developing the income estimate, the assessor
shall analyze the nature of the government payment and its relationship to the
cash rent or the crop-share rental income for the property;
005.03A(3) Typical cash rent per animal unit
month in the case of grassland use.
005.03B The expenses deducted shall reflect
those typical to the land capability group observed for the parcel of land and
may include a proration of shared input costs of production if a crop-share
income is estimated.
005.03C The
capitalization rate shall include, but not be limited to:
005.03C(1) An appropriate discount rate for
the land use of the parcel of land;
005.03C(2) An adjustment for change in land
value;
005.03C(3) The effective tax
rate for the parcel of land; and,
005.03C(4) Any other appropriate adjustment
to arrive at an overall capitalization rate.
005.04 The assessor shall maintain a file of
all data used for determining the special and actual valuation. This
information shall be filed with the Department of Revenue Property Assessment
Division on or before March 1 of each year. The information shall be considered
a public record and available for inspection by the Department of Revenue,
Property Assessment Division, the Tax Equalization and Review Commission, or
any interested person. The file shall include, but not be limited to:
005.04A A determination of the highest and
best use of the properties to be valued;
005.04B An explanation of the valuation
models used in arriving at the value estimates;
005.04C A delineation and explanation of
"market areas" recognized in the analysis;
005.04D An explanation and analysis including
documentation of adjustments made to sales to reflect current cash equivalency
or typical market conditions;
005.04E An explanation and analysis of the
estimate of economic rent or net operating income used in an income
capitalization approach including estimates of yields, commodity prices,
typical crop share, or documentation of cash rents;
005.04F An explanation and analysis of
typical expenses allowed in an income capitalization approach;
005.04G An explanation and analysis of the
overall capitalization rate used in an income capitalization approach;
and,
005.04H Any other information
necessary in supporting the estimate of valuations.
