Glossary of Terms
Ad Valorem Tax: A tax levied in proportion to the value of the thing(s) being taxed. Exclusive of exemptions, use-value assessment laws, and the like, the property tax is an ad valorem tax.
Apartments: All apartment buildings with four or more units.
Appeal: The formal or informal process by which a property owner contests an assessment.
Appraisal: An estimate or opinion of value. The resulting opinion of value derived from the appraisal may be informal (transmitted orally) or formally (presented in written form). An appraisal is usually a written statement setting forth an opinion of the value of an adequately described property as of a specified date, supported by the presentation and analysis of relevant data.
Appreciation: Increase in value of a property, in terms of money, from all causes. For example, a farm may appreciate if a shopping center is built nearby, and property of any sort may appreciate as a result of inflation.
Assessment Roll: The basis on which the property tax levy is allocated among the property owners in a jurisdiction with taxing powers.
Assessed Value: The property value assigned by the assessor for purposes of taxation. The state of Massachusetts requires assessments to be at 100% of market value.
Assessment Year: The 365 days beginning with the appraisal date. In the city of Brockton, the assessment year begins on July 1 and ends on June 30.
Assessor: The head of an assessment jurisdiction. In the city of Brockton, the assessor is called the Chairman of the Board of Assessors
Commercial/Industrial Use Class: The commercial/industrial use class consists of properties where the predominant use is the selling of merchandise or a service, or the assembly, processing, and manufacturing of products. This class also includes office buildings and vacant land where the most likely use would be commercial.
Computer Assisted Mass Appraisal (CAMA): A system of appraising property, usually only certain types of real property, that incorporates statistical analysis such as multiple regression analysis and adaptive estimation procedure to assist the appraiser in estimating value.
Condominium: A form of ownership of separate units or portions of multiunit buildings that provides for formal filing and recording of a divided interest in certain real property and an undivided interest in common areas.
Cost Approach: One of the three approaches to value, the cost approach is based on the principle of substitution -- that a rational, informed purchaser would pay no more for a property than the cost of building an acceptable substitute with like utility. The cost approach seeks to determine the replacement cost of an improvement less depreciation plus land value.
Date of Sale: The date on which the sale was agreed to. The sale date represented in the city of Brockton real estate files is the date of the deed.
Deed Book and Page Number / Instrument Number: A means (usually numeric) of identifying and accounting for each property transfer of ownership. The properties are referenced by grantor and grantee names, and include legal description, sale price and date of transfer. Since July 1997, the city of Brockton has used instrument numbers to reference transfer of ownership.
Easement: A right held by one party to use the land of another for a specific purpose, such as access to other property.
Equalization: The process by which an appropriate governmental body attempts to ensure that property under its jurisdiction is appraised equitably at market value or as otherwise required by law.
Exempt Use Class: Properties granted tax exemptions for religious, charitable, nonprofit, educational, or governmental use. Only exemptions specifically permitted by state law are granted.
Fixture: An item of equipment that, because of the way it is used, the way it is attached, or both, has become an integral part of a building or other improvement. For example, a tub fixture becomes real estate once it is installed in a property.
Income Approach: That procedure in appraisal analysis which converts anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The income approach is widely applied in appraising income-producing properties. Anticipated future income and /or reversions are discounted to a present worth figure through capitalization process.
Instrument: A formal legal document such as a deed, contract, will, or lease.
Legal Description: A statement in words or codes identifying land for all purposes of law.
Market Value: The amount a typical, well-informed purchaser would be willing to pay for a property. For a sale to represent market value, the seller must be willing (but not under pressure) to sell and the buyer must be willing (but not under any obligation) to buy. The property must be on the market for a reasonable length of time, the payment must be in cash or its equivalent, the financing must be typical for that type of property and the transaction must not be affected by any undue pressures.
Mass Appraisal: The process of valuing a group of properties as of a given date, usually standard methods, and allowing for statistical testing.
Multifamily Use Class: All residential properties containing two or more dwelling units.
Neighborhood: The environment of a subject property that has a direct and immediate effect on value. A geographic area (in which there are typically fewer than several thousand properties) defined for some useful purpose, such as to ensure for later multiple regression modeling that the properties are homogeneous and share important location characteristics.
Parcel ID Number: A code, usually assigned to each property in the city of Brockton for identification purposes. The Assessors office uses Map, Route and Plot to identify parcels.
Personal Property: All property, other than real property. Personal property is not permanently attached and is, therefore, movable.
Real Property: The rights to land and improvements to the land.
Residential Use Class: The residential use class of property includes all property for used predominantly for living purposes. This class also includes vacant land where the most likely use would be residential development. Hotels, motels, and resorts are classified as commercial property.
Sale Price: The price for which a property was sold. Sales Comparison Approach: One of the three approaches to value. That approach in appraisal analysis which is based on the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing property with the same utility. This approach is applicable when than active market provides sufficient quantities of reliable data which can be verified from authoritative sources.
Sale Ratio: The ratio of an appraised (or assessed) value to the sale price of a property expressed as a percentage of the sale price.
Assessed Value $69,000 AV. Sale Ratio = ---------------- Example: 92% = --------------
Sale Price $75,000 SP
Tax Base: The total assessed value of all the properties in the city of Brockton that are subject to local property taxes.
Tax Exemption: Total exemption or freedom from tax such as is granted educational, charitable, religious, and similar nonprofit organizations. Exemptions may also be partial, such as tax exemptions permitted by, enterprise zone and rehabilitation programs, and the elderly/disabled tax freeze.
Tax Levy: In terms of property taxes, the total revenue to be generated by the tax.
Tax rate: The tax levy divided by the tax base. It is often expressed in terms of dollars per thousand. The tax rate is multiplied by the assessed value to determine the amount of tax that each property must pay.
Use Class: One of the following classes of property: Single Family Residential, Multifamily Residential, Commercial/Industrial, Vacant Land, and Exempt.
Vacant Land Use Class: Unimproved land with no buildings or structures.
Definitions adapted from: Real Estate Appraisal Terminology, revised edition, compiled and edited by Bryl N. Boyce, Ph.D., SRPA
Property Appraisal and Assessment Administration, general editor Joseph K. Eckert, Ph.D.