If the market value of the property exceeds the factored base year value plus $1 million, the amount in excess of this sum will be added to the factored base year value.
Example 1:
A family home has a factored base year value of $100,000. The market value of the property on the date of transfer is $900,000.
The factored base year value plus $1 million ($100,000 + $1,000,000 = $1,100,000). This is more than the current market value ($900,000 - $1,100,000 = $-200,000). The new taxable value is $100,000.
Example 2:
A family home has a factored base year value of $100,000. The market value of the property on the date of transfer is $1,300,000.
The factored base year value plus $1 million ($100,000 + $1,000,000 = $1,100,000). This is less than the current market value ($1,300,000 - $1,100,000 = $200,000). The new taxable value is $300,000. ($100,000 + $200.000 = $300,000)