For the purpose of assessment administration, real property is divided into three primary subclasses:  residential, farm and commercial/industrial.  Interests in real estate, such as unmined minerals (oil, gas, limestone and coal) and timber, are also assessed as real property.

Residential Property

Residential property is comprised of small parcels (generally less than 10 acres), usually measured in square footage, linear front footage or acreage.  This property typically contains residential improvements; however, vacant land intended or zoned for residential purposes is also classified as residential property.  Duplexes and single family dwellings converted to multiple family use are generally classified as residential. However, apartment buildings and complexes (which are intended solely for income producing purposes) must be classified as commercial property.  Condominiums are considered to be residential property since they are individually owned and conveyed.

Farm Property

Farm property is land used for the purpose of producing agricultural products such as corn, tobacco, wheat, soybeans, fruit and vegetables, pork, beef, poultry, and horses.  Timberland is also classified as farm property.  In practice, any large parcel of land (generally over 10 acres) that is not specifically used for commercial or residential purposes is classified as farm property.  This does not mean, however, that all property classified as farm is eligible for the agricultural deferment program.

Commercial Property

Commercial property is land with buildings constructed for business purposes, such as retail, wholesale or manufacturing.  Vacant land intended for business purposes is also classified as commercial.  Many commercial improvements are specially constructed for a particular use and their use for any other purpose would require major alteration.  Commercial parcels may be relatively small, such as in the central business districts of urban areas, and measured by the square foot or linear front footage; however, large shopping centers or industrial parks may cover many acres.  Industrial property is included with other commercial property for assessment administration purposes.  In general, industrial property can be described as land and/or buildings intended for the use of manufacturing.  Typically, fairly large tracts of land are needed for industrial purposes.  Most manufacturing improvements are designed and constructed specifically for a particular manufacturing process.  As of January 1, 2006, all telecommunication company's real property is locally assessed.

Interests

The real estate owner may sever and/or transfer the ownership of timber rights or subsurface rights such as coal, oil and gas to another person or corporation.  These rights are assessed as real property against the person or corporation to whom the rights are transferred.  A lessee may be liable for property tax on a leasehold interest if it has value.  The separation of the ownership of improvements from land is also recognized.  The building owner and the land owner may thus be assessed separately.