Since the tax is apportioned to various properties in proportion to the value of each, it is necessary for the taxing body acting by its representatives to examine and equitably appraise all taxable property. Various methods of appraisement are used, some of which take the property at a fraction of real market value, such as one-half, two-thirds, or three-fourths. Others figure the value to be the amount for which the property would sell at a forced sale, and again others use as a basis the full market value of the property. Many large cities use the last method and this is generally coming to be recognized as the only one which is fair and equitable. Full market value has been defined as the price which one who wishes to buy, but is not compelled to buy, would pay to a seller willing but not compelled to sell. Prices paid at auction sales, particularly forced sales, do not usually measure true market value, and neither do prices paid for property by those who have a need for that particular property only.

The assessor, in valuing property, frequently separates the values of land and buildings. The land is valued on the basis of the value of a standard or typical lot. That is, a lot of the unit of size usually marketed in the vicinity. If the assessor fairly determines the value of such a lot, he allocates to all similar lots the same value. It will of course be seen that in the valuation of lots in cities and villages each street and, in fact, each block must be considered separately. Main thoroughfares and business streets create values in excess of those on side streets and in residential districts. Corners, corner influences, plottage and similar circumstances are taken into account in order that the assessor may make an equitable appraisement, one that is fair and just both to the tax payer and the community. In certain cities maps are published by the tax departments giving the front foot value of land in each block of the entire city.

The standard lot is usually considered to be one hundred feet in depth. Lots of varying depths are appraised by rules which have been devised for the purpose. New York City assessors use the Hoffman-Neil rule which calculates the proportion of value of each foot in depth from one foot to one hundred feet.

While all lots in a block may have the same value, the buildings may be different both as to size and character. In the valuation of buildings the tax assessor must consider whether they are new or old and whether they are or are not the proper improvement for the land. New buildings are usually worth their cost of production and the assessment is computed on that basis. As the age of a building increases, allowance is made for depreciation. When the land value remains stationary and the building depreciates through age the total valuation of land and building will therefore tend to decrease year by year. In many localities, land increases in value as time goes on, due to its availability for a better building; that is to say, one producing a greater rental. The assessed valuation of the lot improved with an old building will increase but the total of land and building will remain the same. In such cases the building is assessed, not at its cost less depreciation, but at the amount it adds to the value of the land. This condition may progress so that a once valuable building adds to the land merely a nominal amount.

Assessors should always consider the rent a building is capable of producing. It has been stated as a principal that an improved parcel of real estate is never worth more than its capitalized rental value unless the land alone exceeds in value this capitalized sum.

The cost of a building of a certain type can be determined to a fair degree of accuracy by means of certain factors derived from experience in actual building costs. These may be the cost per foot of the cubical contents of the building or the cost per square foot of floor surface. The type of building is first considered, - loft, factory, non-fireproof walk-up apartment, elevator apartment, office building, etc. Then its size is ascertained. The proper unit is applied and the result is the estimated cost of the building. The units of cost are subject to revision and change from time to time to meet varying conditions.