Revaluation in progress across area
By Steve Herring
Published in News on July 25, 2010 1:50 AM
County tax officials say it is too premature to speculate on what the ongoing property revaluation will reveal about property values and their average percentage of growth since the 2003 revaluation.
Even when the new schedule of values is presented to commissioners in late fall, property owners need to remember that they cannot use the county average to calculate their property taxes, said Alan Lumpkin, assistant tax administrator.
One person's property value might have increased by 5 percent, while someone else's may have gone up 15 percent, Lumpkin said.
Property owners will receive their new property value notices in the spring. The values will be based on the property's market value as of Jan. 1, 2011.
"Until we notify them in the spring, we really won't be able to give them a new value," said David Ward, tax administrator. "That is their notification."
The notification will include paperwork to file an informal appeal.
Once an informal appeal is filed, the tax office will review the property.
"Depending on what they tell us on their informal appeal, we might have to go inside the property," Ward said. "Once we review that, we will determine if an adjustment needs to be made. If it does, we can make it. If we feel like we have a good value on it, then we make no adjustment and we notify the taxpayer."
In that case, the taxpayer might appeal to the county commissioners sitting as the Board of Equalization and Review.
Ward said tax officials stress to people that the tax office is required by law to look at the property's fair market value.
"Don't file an appeal with us because the taxes are too much," Lumpkin said. "That is out of our control. We are just talking values."
The taxes are controlled by commissioners when they set the tax rate, he said.
Lumpkin said that if people plan to appeal they need to have a valid reason as well as an idea of the property's value.
"It is up to the homeowner, if they feel it is an unfair value, tell us why," he said. "Give us reasons why it is not worth the value. If you think it is worth this amount, why do you feel like it is worth this amount?"
Since the appraisers do not enter the properties, it is possible there are internal problems like a leaking roof, termite damage or it might not have been properly maintained, he said. Those are the kind of things that have an effect on the value.
Why revalue?
People have a misconception that revaluations are done to raise taxes, Lumpkin said.
Rather, he explained, a revaluation's purpose is to redistribute equity across the county. For example, an area that might have been increasing in values years ago could now be dropping, while an area that had been low could have grown in value.
State law requires the revaluations be conducted every eight years. There are provisions that allow them to be held on four-year cycles as well.
"The main function of the schedule of values is to have a guideline for the next eight years," Lumpkin said. "Once we come up with that schedule of values, it is in place for the next eight years. Years from now if the economy goes boom, we cannot go up on property values. We are stuck with that schedule of values we adopt this year."
The system maintains equity across the county since everybody is paying on that same snapshot in time -- Jan. 1. 2011, he said.
"Like now, we are still stuck with 2003 values," Lumpkin said. "They may spend $250,000 for a new house. We will send a notification saying you will assessed at $175,000. They will say, 'did I pay too much for my property?' We have to explain to them, 'no, that for tax purposes you are still paying like it was there in 2003.
"When the new valuation is in place, we can recognize what the current value of that property is, which is $250,000. It is sort of confusing, but that is the law."
On the flip side, over the past few years during the economic downturn, there have been instances when people have asked if the county was going to adjust the property value downward because of the economy.
"We have to explain the exact same thing -- our values go back to 2003," Ward said. "Like Alan said while most (values) were increasing from 2003 to 2008 we could not increase them until our next reval. By the same token, we could not decrease them. The way state law is written, that is something that people have a hard time understanding.
"Everybody thinks that when they are building or buying something, 'I am buying it right now. This is what the market value is. This is what it is worth.' They don't understand that we have to go back to a snapshot in time."
To get a feel for the values, the county is looking at late 2009 sales, Lumpkin said.
"So we try to get as current and as close we can up to that date (Jan. 1, 2011) checking sales and checking sales to see if we can see any market trends," Ward said. "We have sales out there. I don't think we have had the volume we had the last reval."
However, properties that are selling are on the market longer, Lumpkin said.
Back in the "heydays" of 2003, a property might have been on the market three months, while now it is more like six months or 12 months, he said.
How revaluation works
Lumpkin said the county has crews working in the field reviewing properties -- something that will continue through late fall.
"They are going from property to property looking at it, comparing it to our current real estate information," he said. "If they see any changes, any differences, anything of that sort, then they stop and recheck the property physically, remeasure and recheck. They are really looking for any kind of additions. If somebody added a free-standing garage. If somebody has added on a deck, things like that.
"We are looking for structural changes or deletions. A lot of time people will tear down old buildings like farm buildings and they forget to notify us. Like David said, what we are finding mostly is somebody closing in a garage or adding a little room on the back. For whatever reason, we didn't get the permit or they may not have got a permit. We are looking for changes in the property. We feel pretty good about our information we have on our cards currently, so what we are looking for is anything that has changed from 2003 (the last revaluation) to now."
If somebody has an air conditioning unit at the property already and they get a new one that does not change the tax office records, he said.
"If they did not have air conditioning previously and they added air conditioning that would change things," he said.
Appraisers also are looking at the condition of the property.
"When we value property we may consider average condition," Ward said. "They are looking at the exterior of the property. In most cases, if the exterior is in pretty good shape then the interior probably will be also. We can't go into all of the properties obviously so we are looking for the exterior property. If it is worn and needs a little tender loving care we take that into consideration when we do our evaluation because that would affect the selling price."
Lumpkin said appraisers are driving county vehicles and will have county identification cards.
"We started in the Grantham community. We worked our way to Brogden, Mount Olive area and going to come around to Seven Springs and going all around the county so we will be getting different areas at different times."
Work on revaluation started in the office around the first of the year including installing new software. Inside the office, staff is looking at the most current sales data -- what farmland and residential property are selling for in different areas.
From that analysis will come the new schedule of values that will be presented to county commissioners in the fall.
"All that is, is basically an overall view, sort of a generic view, of what the values are in the county for different kinds of property," Lumpkin said. "We will go into a neighborhood and pull sales and what things are selling for then come up with what we feel is a fair market value for that neighborhood."