132.191 Valid valuation methods — Minimum applicable appraisal standards. (1) The General Assembly recognizes that Section 172 of the Constitution of Kentucky requires all property, not exempted from taxation by the Constitution, to be assessed at one hundred percent (100%) of the fair cash value, estimated at the price the property would bring at a fair voluntary sale, and that it is the responsibility of the property valuation administrator to value property in accordance with the Constitution.
(2) The General Assembly further recognizes that property valuation may be determined using a variety of valid valuation methods, including but not limited to:
(a) A cost approach, which is a method of appraisal in which the estimated value of the land is combined with the current depreciated reproduction or replacement cost of improvements on the land;
(b) An income approach, which is a method of appraisal based on estimating the present value of future benefits arising from the ownership of the property;
(c) A sales comparison approach, which is a method of appraisal based on a comparison of the property with similar properties sold in the recent past; and
(d) A subdivision development approach, which is a method of appraisal of raw land: 1. When subdivision and development are the highest and best use of the parcel of raw land being appraised; and 2. When all direct and indirect costs and entrepreneurial incentives are deducted from the estimated anticipated gross sales price of the finished lots, and the resultant net sales proceeds are then discounted to present value at a market-derived rate over the development and absorption period.
(3) The valuation of a residential, commercial, or industrial tract development shall meet the minimum applicable appraisal standards established by: (a) The Kentucky Department of Revenue, as stated in its Guidelines for Assessment of Vacant Lots, dated March 26, 2008; or (b) The International Association of Assessing Officers. (4) To be appraised using the subdivision development approach, a subdivision development shall consist of five (5) or more units. The appraisal of the development shall reflect deductions and discounts for: (a) Holding costs, including interest and maintenance; (b) Marketing costs, including commissions and advertising; and (c) Entrepreneurial profit. Effective:July 12, 2012 History: Created 2012 Ky. Acts ch. 94,
INTERNATIONAL ASSOCIATION OF ASSESSING OFFICERS
STANDARD ON MASS APPRAISAL OF REAL PROPERTY—2013
3.3.5 Alternative to Periodic On-site Inspections
Provided that initial physical inspections are timely completed and that an effective system of building permits or other methods of routinely identifying physical changes is in place, jurisdictions may employ a set of digital imaging technology tools to supplement field re-inspections with a computer-assisted office review.
These imaging tools should include the following: • Current high-resolution street-view images (at a sub-inch pixel resolution that enables quality grade and physical condition to be verified) • Orthophoto images (minimum 6” pixel resolution in urban/suburban and 12” resolution in rural areas, updated every 2 years in rapid growth areas, or 6–10 years in slow growth areas). • Low level oblique images capable of being used for measurement verification (four cardinal directions, minimum 6-inch pixel resolution in urban/suburban and 12-inch pixel resolution in rural areas, updated every 2 years in rapid growth areas or, 6–10 years in slow growth areas).
These tool sets may incorporate change detection techniques that compare building dimension data (footprints) in the CAMA system to georeferenced imagery or remote sensing data from sources (such as LiDAR [light detection and ranging]) and identify potential CAMA sketch discrepancies for further investigation.
Assessment jurisdictions and oversight agencies must ensure that images meet expected quality standards. Standards required for vendor-supplied images should be spelled out in the Request for Proposal (RFP) and contract for services, and images should be checked for compliance with specified requirements. For general guidance on preparing RFPs and contracting for vendor-supplied services, see the Standard on Contracting for Assessment Services [IAAO 2008].
In addition, appraisers should visit assigned areas on an annual basis to observe changes in neighborhood condition, trends, and property characteristics. An onsite physical review is recommended when significant construction changes are detected, a property is sold, or an area is affected by catastrophic damage. Building permits should be regularly monitored and properties that have significant change should be inspected when work is complete.