Tax Rules: Final: 5703-25
As used in rules 5703-25-05 to 5703-25-17 of the
(A) "True value in money" or "true value" means one of the
(1) The fair market value or current market value of property
and is the price at which property should change hands on the
open market between a willing buyer and a willing seller,
neither being under any compulsion to buy or to sell and both
having a knowledge of all the relevant facts.
(2) The price at which property did change hands under the
conditions described in section 5713.03 of the Revised Code,
within a reasonable length of time either before or after the
tax lien date, unless subsequent to the sale the property
loses value due to some casualty or an improvement is added
to the property.
(B) In compliance with the provisions of sections 5713.01,
5713.03, 5715.01 and 5715.24 of the Revised Code, the
"taxable value" of each parcel of real property and the
improvements thereon shall be thirty-five per cent of the
"true value in money" of said parcel as of tax lien date in
the year in which the county's sexennial reappraisal is or
was to be effective beginning with the tax year 1978 and
thereafter or in the third calendar year following the year
in which a sexennial reappraisal is completed beginning with
the tax year 1978.
(C) "Computer assisted appraisal systems" - A method in which
the value of a property is derived by any or all of the
following computerized procedures:
(1) Multiple regression analysis using sales to form the data
base for valuation models to be applied to similar properties
within the county.
(2) Computerized cost approach using building cost and other
factors to value properties by the cost approach as defined
in this rule.
(3) Computerized market data approach where a subject
property is valued by adjusting comparable sales to subject
by adjustments based on regression or other analyses.
(4) Computerized income approach using economic and income
factors to estimate value of properties.
(5) Computerized market analysis to provide trend factors
used by appraisers as basis of market valuation.
(D) "Cost approach" - A method in which the value of a
property is derived by estimating the replacement or
reproduction cost of the improvements; deducting therefrom
the estimated physical depreciation and all forms of
obsolescence if any; and then adding the market value of the
land. This approach is based upon the assumption that the
reproduction cost new normally sets the upper limit of
building value provided that the improvement represents the
highest and best use of the land.
(E) "Effective tax rate" - Real property taxes actually paid
expressed as a percentage rate in terms of actual true or
market value rather than the statutory rate expressed as
mills levied on taxable or assessed value. In Ohio four
factors must be considered in arriving at the effective tax
(1) The statutory rate in mills;
(2) The composite tax reduction factor as calculated and
applied under section 319.301 of the Revised Code;
(3) The percentage rollback prescribed by section 319.302 of
the Revised Code;
(4) The prescribed assessment level of thirty-five per cent
of true or market value.
(F) "Income approach" - An appraisal technique in which the
anticipated net income is processed to indicate the capital
amount of the investment which produces the net income. The
reliability of this technique is dependent upon four
(1) The reasonableness of the estimate of the anticipated net
(2) The duration of the net annual income, usually the
economic life of the building;
(3) The capitalization (discount) rate;
(4) The method of conversion (income to capital).
(G) "Market data approach" - An appraisal technique in which
the market value estimate is predicated upon prices paid in
actual market transactions and current listings, the former
fixing the lower limit of value in a static or advancing
market (price wise), and fixing the higher limit of value in
a declining market; and the latter fixing the higher limit in
any market. It is a process of correlation and analysis of
similar recently sold properties. The reliability of this
technique is dependent upon:
(1) The degree of comparability of each property with the
property under appraisal;
(2) The time of sale;
(3) The verification of the sale data;
(4) The absence of unusual conditions affecting the sale.
(H) "Replacement cost"
(1) The cost that would be incurred in acquiring an equally
desirable substitute property;
(2) The cost of reproduction new, on the basis of current
prices, of a property having a utility equivalent to the one
being appraised. It may or may not be the cost of a replica
(3) The cost of replacing unit parts of a structure to
maintain it in its highest economic operating condition.
Promulgated under: 5703.14
Authorized by: 5703.05
Amplifies: 5713.01, 5715.01
Prior effective dates: 10-20-81 as 5705-3-01