What is the assessed value for bona fide residential transitional property?

The assessed value for bona fide residential transitional property is determined to be 40 percent of its current use value. This concept is rooted in the classification of transitional properties, which are often in the process of changing from one use to another and may not reflect their highest and best use in the market.

Current use value takes into account the income-generating potential of the property at its present usage rather than its highest value if developed for its most profitable use. By assessing transitional properties at 40 percent of their current use value, the assessment reflects a more practical valuation that acknowledges the property’s existing state and the realities of its market behavior, rather than projecting future potential that may not be realized in the short term.

This approach aligns with state laws and policies designed to provide equitable taxation while promoting investment and stabilization in neighborhoods undergoing change. Other potential answers would involve differing percentages or methods that do not align with established practices for assessing transitional properties.