Purpose of Appraisals
The purpose of the appraisals generated by the Yavapai County Assessor’s office is to estimate the market value for ad valorem tax purposes only. The date of evaluation is January 1st of each year. The primary Arizona state statutes which govern property taxation are found in Chapter 11 of Title 42 of the Arizona Revised Statues .
Full Cash Value
Full Cash Value in the assessment process refers to the value of a property in the ad valorem (“according to value”) property tax system. In Arizona, the Full Cash Value is based on sales ratio requirements set by the Department of Revenue as defined for each Property Class. Therefore, the Full Cash Value is only an indirect reflection of actual market value.
According to The Appraisal Foundation, market value is defined as the most probable price in terms of money that a property would bring in an open and competitive market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, 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 in the passing of title for seller to buyer under conditions whereby:
- Buyer and seller are typically motivated
- Both parties are well-informed
- Reasonable time is allowed for exposure to the open market
- Payment is made in cash or its equivalent
Highest and Best Use vs Current Use
Highest and Best Use
That which will most likely generate the highest net return to the property over a reasonable period of time.
To qualify, the use must meet four criteria:
- Legally permissible
- Physically possible
- Financially feasible
- Most productive
Arizona Statute states that current use shall be considered in the determination of Full Cash Value for property tax appraisal purposes.