Factors considered when determining market value of oil and gas leasehold properties include past and present production history, current oil and gas prices, and remaining reserves. The State of Kansas publishes a guide that is followed to help in the determination of the market value of oil and gas. The formula is used to “determine today’s benefit for future revenues discounted to present value”.
The ad valorem tax (local personal property tax) that you are billed for on your royalty tax statement is based upon value; therefore, there are some years in which the taxes may appear high and way out of line when your income is down. Personal property taxes are always for the prior year so the prior year’s production is used in the formula. A loss in one year’s income does not eradicate value. An example of this would be a farmer who is hailed out one year, but does not see a decrease in the market value of his farm ground.
Gas wells may be shut in during the current year, but still have large reserves and are capable of producing a lot of gas, causing taxes to remain high with income down for the year. The values placed on these royalty interests are supported by offers from several investors to purchase these properties.
Pursuant to L, 1991, ch 279, new-sec. 2
Results of the Market Study Analysis for residential vacant lot and commercial real estate of Kearny County, for Assessment year 2023.
A study of the real estate market indicated that the market is relatively stable with a slight
upward trend in some neighborhoods. The market studies of real estate were based on analysis of valid, arms length sales of real estate, which occurred in the years 2018 through 2022.
Values on specific properties may change because of changes in the property, correction of
descriptive information or calibration of values based on sales of similar properties.
All of the new values were reviewed by the Appraiser’s office based on an inspection of the
property. During the review of final values, no contact with the property owner was made unless additional information was needed to resolve a question concerning property characteristics.
In accordance with the provisions in K.S.A. 79-1476, the Division of Property Valuation is
required to annually furnish each county the results of the study relating to changes, if any, of the Use Value of agricultural land. Changes can and do occur as result of several factors including cropping practices, commodity prices and production costs. Dry crop and irrigated land values for Kearny County will have a moderate decrease in 2023.
The study relating to Use value of agricultural land completed by the Division of Property
Valuation resulted in valuing ag land by soil types beginning in 1999.
By March 1, 2023 or thereafter the County Appraiser’s office will mail Change of Value Notices to all owners of record indicating the appraised value of their property as of January 1, 2023 for the tax year 2023.
THE CHANGE OF VALUE NOTICE IS NOT A TAX BILL. It serves only as the property owner’s official notification of the county appraiser’s estimate of value for the property.
The County Appraiser has fielded several questions regarding increases in Agricultural land taxes. As a result the Appraiser would like to share this article from Kansas Agland with Kearny County.
|Letisha Esquibel||County Appraiser|