Content area
Full Text
Methods of property tax assessment have changed dramatically in the time since the International Association of Assessing Officers (IAAO) first organized in 1934 as the National Association of Assessing Officers. The task of property assessment has existed in the United States since Colonial times, but it wasn't until the late nineteenth and early twentieth century that scholars and practitioners began to examine the theoretical basis behind property valuation. At the same time, appraisers and assessment officials began to explore the best means to identify property value. These discussions led to the development of methodologies, and eventually computerized valuation models, that today help ensure that property assessment is performed in a fair, efficient, and accurate manner.
This article traces the historical evolution of appraisal practice from the beginnings of the concept of the approaches to value to the introduction of computerized valuation through computer- assisted mass appraisal (CAMA) to the evolution of sophisticated automated valuation models (AVMs). It explores how economic and valuation theories have affected the development of appraisal methods through the years. The article also describes how social, political, and economic forces-most famously, citizen tax revolts-have shaped assessment policy and practices. The article further identifies current topics being vigorously debated among assessment professionals and the continuing challenges facing the property tax system.
Throughout its 75-year history, the International Association of Assessing Officers has had a profound impact upon the development, evolution, standardization, and education in assessment-related valuation, especially as it concerns mass appraisal practices used throughout the world today.
Historical Perspective
Property taxes may be a centuries-old form of taxation, but the principles and procedures used to assess them are not nearly as fixed as one might expect. The understanding of basic terms and the real estate appraisal practices and principles used for valuation continue to evolve. For example, the modern definition of market value was still being refined as recently as two decades ago (Appraisal Institute 2002, 178). In the nineteenth century, rent capitalization served as the predominant method of value determination. During the twentieth century, two more approaches to value, cost (initially referred to as scientific appraisal) and market comparison, were defined and their use became widespread. Although it may not be generally recognized, all valuation methods are rooted in the...