When valuing vacant residential land, we use the most reliable methodology for the neighborhood or market area in which a parcel is located. Typically, we use the Sales Comparison Approach to value land. With this method, we review, analyze and apply the median sale prices of vacant lot/land sales to arrive at a market unit price for a neighborhood, subdivision or market area.

When no vacant land sales are available to utilize, we may rely on either the Land Allocation or Land Extraction (Residual) methods.

In Land Allocation, we apply a ratio, or percentage of site value to the overall value of the property. This percentage is based on sales from competing locations/neighborhoods. The ratio or percentage applied to land and buildings is dependent on location. For example, a property that sold for $1,000,000 may indicate 30% of the value as land and 70% as improvements in one location; or 50% of the value as land and 50% as improvements in another location.

For the Land Extraction (Residual) method, sale prices of improved properties are used with the improvement's depreciated value subtracted from the sale price, thus leaving us with an "extracted" land value. This method is most reliable when the improvements to the property are new and there is little to no depreciation.

 

For single-family residential properties in Collier County, we primarily apply the Cost and Sales Comparison Approaches to value.

In the Cost Approach, we estimate both a Land Value and the Depreciated Replacement Costs of the improvements on the property. We utilize the Marshall & Swift Residential Cost Handbook along with actual building costs (when available), permit information, and specific builder's website information to estimate building costs. Depreciation is based on tables in the Marshall & Swift handbook.

The Sales Comparison Approach is based on statistical analysis from a Computer Assisted Mass Appraisal (CAMA) process. Sales ratio studies and models are used to determine the mean and median sale prices in neighborhoods and sub-markets. In the Mass Appraisal process, when studies are completed, the median prices are considered most reliable and applied to all properties in a specific market area to determine value.

The Sales Comparison Approach is the primary approach used to value residential condominiums and co-ops.

The Sales Comparison Approach for single-owner residential condominiums is based on statistical analysis from a Computer Assisted Mass Appraisal (CAMA) process. As with single-family residential, sales ratio studies and models are used to determine the mean and median sale prices in individual condominium projects along with competing neighborhoods and sub-markets. In the Mass Appraisal process, when studies are completed, the median prices are considered most reliable and applied to all properties in a specific market area to determine value.

Commercial condominiums are valued with consideration given to both the Sales Comparison and Income Approachess.

All commercial properties in the county are valued through reconciliation of the Cost, Sales Comparison, and Income Approaches to value.

The Cost and Sales Comparison Approaches utilize the same methodology as explained in the preceding Land and Single-Family Residential commentary.

The Income Approach is based on Fee Simple Valuation. Income considerations include rents, vacancy rates, expenses, and cap rates. In the Fee Simple Valuation, current market or economic data is utilized in the valuation of the property. We continually solicit actual property specific data and monitor the market for local rental rates, vacancy, operating expense, and cap rate data, then apply it accordingly to the "use type" of commercial property being valued.

All three approaches are considered, then weighted to reconcile to a final conclusion of value. The applicability and weighting of each approach varies depending on the property type. For example, the Income Approach could be more applicable and more heavily weighted in valuing investment type properties likely to be leased, versus properties that are predominantly owner-occupied. Apartment complexes, multi-tenant office buildings, retail shopping centers, and fast food restaurants are examples of income producing properties for which the Income Approach could be more heavily weighted. A single-user industrial property or small medical office are examples of properties for which the Sales Comparison Approach could be more heavily weighted. The Cost Approach is applicable to all property types; however, would likely be more heavily weighted for new construction and-or specialty type properties.
 

Agricultural land has value because of its productivity and ability to generate income. The property appraiser may use the Sales Comparison, Income, and Cost Approaches in estimating the value of agricultural lands in Florida for ad valorem tax purposes. The property appraiser has discretion in selecting the approach to be used. Whichever approach is used, care must be exercised to ensure value conclusions do not exceed market values (see s. 193.441(1), F.S.). The property appraiser shall rely on 5-years of moving average data when utilizing the income methodology approach in an assessment of property used for agricultural purposes.

For instance, Cropland Valuation is derived by determining land rents for growing crops, then subtracting appropriate expenses and dividing the results by the agricultural Capitalization Rate. Then an average of the last 5 years is utilized to determine the value.

Tangible Personal Property (TPP) represents physical assets used in an ongoing business enterprise which are used to derive value and operate a business. Some examples of tangible personal property assets include furniture, fixtures, equipment (FF&E),leasehold improvements, machinery, computers, electronics, signage, and supplies (not for resale).

Businesses of all kinds (i.e. any proprietorship, partnership, corporation, home based business, self-employed agent, etc.) are required to file a TPP tax form (DR-405) by April 1st reporting the assets they possess as of the date of assessment (January 1st) every year. These assets are then valued by our office under the premise of fair market value, as an assemblage and at the highest and best use in a going-concern.

The preferred method of valuation used is the Cost Approach, as it is deemed the most fair, equitable, and fiscally responsible for this category of assets. This method allows our office to assign an appropriate economic life to the original cost of assets reported. These original costs are adjusted each year using Index Factors, a tool used to adjust the original cost of an asset to today's dollars. Once determined, our office then depreciates an asset's value based on its economic life. The resulting value is considered an asset's fair market value.

Other valuation methods may also apply. For example, the Income Approach valuation method may be considered if appropriate and accurate financial and income documents are provided by a filer. The Sales Approach is used as part of our annual market study. Our office tracks business sales (complete assemblage of furniture, fixtures & equipment in a going-concern) in Collier County. This sales data is analyzed and provides an opportunity to adjust the national indicators to our local market. The annual market study ensures a confidence level in the trended depreciation tables we utilize.

All businesses that file a TPP return (Form Dr-405) by April 1st are eligible for up-to a $25,000 exemption. If a going concern's total fair market value of all assets is less than $25,000, no tangible personal property tax will be calculated for that year. Conversely, any remaining taxable value after the $25,000 exemption is applied will be taxed according to the millage rate(s) for the area(s) in which a business concern operates.

If there are any questions or concerns relating to tangible personal property valuation please feel free to call the TPP department at 239-252-8145, email us at tpp@collierappraiser.com or visit our offices at 3950 Radio Rd, Naples FL 34104