A Maine assessor determines that a commercial property in Augusta has a just value of $800,000 but assesses it on the tax rolls at $640,000, resulting in an assessment ratio of 80%. The municipality's mill rate is 20 mills. A neighboring residential property owner challenges this practice, arguing that her property was assessed at 100% of just value while the commercial property received a lower ratio. Under Maine law, which statement best describes this situation?
Correct Answer
A) The practice violates Maine's just value requirement, which mandates that all taxable property be assessed at 100% of just value, and the residential owner may have grounds for an abatement.
Under 36 M.R.S. § 701, Maine law requires that all taxable property be assessed at just value, which is interpreted as 100% of fair market value. Assessing the commercial property at only 80% of just value while assessing the residential property at 100% creates an inequitable and unlawful disparity. The residential property owner is effectively paying a disproportionately higher tax burden relative to market value. This gives the residential owner grounds to seek an abatement on the basis that her property is over-assessed relative to the legally required uniform standard of just value. Maine courts have consistently held that assessment must be uniform and at just value across property classes.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
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