Property Valuation – Cycle Length and Assessment Outcome

Abstract

The conventional belief regarding the frequency of property assessment has been that annual revaluation is optimal. Practices, however, vastly differ from this norm and the length of assessment cycles diverge widely across tax assessing jurisdictions. This study fills a gap in the literature by examining the relation between cycle length and assessment outcomes, using panel data from the early 2000s to 2016 in Virginia and New York as two representative states. We examine the conditional correlation between revaluation lag and assessment uniformity among tax assessing jurisdictions in Virginia. We find that assessment uniformity tends to be lower by three to six percent when revaluation is delayed by an additional year; however, the rate of deterioration does not vary across jurisdictions with different cycle lengths. In New York, we find that switching from irregular to annual assessment is positively associated with assessment uniformity and administrative costs.