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Chatham County revaluation questions answered

Posted Thursday, March 5, 2009

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Pittsboro, NC - Notices of new real estate property values were mailed last month to all Chatham County property owners, according to Tina Stone, tax administrator for Chatham County. “We have had a few calls about revaluation generally and about the new values, so we want to make sure that people get accurate information.”

State law requires all counties to conduct revaluations of property at least every eight years, but many counties, are moving to a four-year cycle to keep taxes more equitable. The four-year cycle is increasingly common for high-growth counties with rising home prices, such as Chatham.

Annual tax bills are calculated based on two factors, not just appraised property values, Stone said. “The other important factor is the tax rate, which is set each year by elected county and city officials.”

According to George Lucier, chair of the Board of Commissioners, the county’s tax rate will be adjusted downward to reflect a “revenue neutral” rate, which means that the county tax rate would be reduced to lessen the overall impact of higher property values on taxpayers.

“Although it is early in the annual budget process, the county commissioners have directed staff to develop a budget at a neutral rate, which would be lower than the current rate of 65.3 cents per $100 of valuation,” Lucier said.

Overall, tax values increased an average of 24% countywide since the last revaluation four years ago, but the actual change in value for each homeowner depended on trends within property’s neighborhood or community. “It is understandable that the national news headlines about the declining real estate market would lead to expectations that we would not have increases of this size,” Stone said.

The major reason why values increased substantially overall is that, thus far, local housing market trends have been more positive than national trends. As of November 2008, the Federal Home Finance Agency reported that the volume of home sales in the Triangle had declined, but home prices had actually increased slightly since 2007.

In the past year, Chatham County’s property values have held steady in most areas. “What most people don’t realize is that state law requires us to use sales prices from January 2005 to the end of 2008 in determining values for 2009.” Stone said. “During that period, we experienced major increases in home prices in much of the county and this is reflected in the new valuations.”

As expected, areas of the county with the highest increases in value had an influx of new and expanding developments with high-end homes built and sold in the past four years. This trend affected the entire eastern part of the county, but also extended into areas northwest and south of Pittsboro.

“It is important for property owners to know that even though their property is located in a section of the county (township) that had a 30% increase in values overall, their property’s value was based on comparable values in their neighborhood or community, not countywide or township trends,” said Stone.

Several of the most frequently asked questions received by the Tax Office are covered below:

Why does the county revalue real estate property?
The main purpose is to ensure uniformity or equity of property taxes, not to increase property tax revenues. The state requires all counties to revalue property periodically so that taxpayers are paying their fair share, based on current market conditions. Without revaluation, some property owners would have to pay more taxes than they should over a long period of time, while others would not be paying enough to cover their fair share.

Can’t the county take the current economic situation into consideration and adjust the new assessed values?
North Carolina laws governing revaluation give counties limited authority to make adjustments in revaluation based on new economic factors. Through the appeal process, the Tax Office can make some adjustments, as long as they are consistent with the adopted Schedule of Values.

What is the Schedule of Values?
The Schedule of Values is a set of rules, standards, and values used in appraising all properties in Chatham County for the 2009 revaluation. Click here to view the 2009 Schedule of Values.

If my appraised tax value increased by 10%, does that mean that my tax bill will go up 10%?
Not necessarily. The appraised value is an important factor in calculating your tax bill, but so is the tax rate adopted by July 1. The Chatham County Board of Commissioners and all elected town boards in the county will adopt tax rates at that time.

What is a “revenue neutral” tax rate?
“Revenue neutral” is the new tax rate that would produce the same tax levied last year, but adjusted for average annual growth in the tax base since the last revaluation. In developing a “revenue neutral” tax rate, officials also must consider the new tax rate’s impact on revenues from personal property, motor vehicles and utility companies, which are not included in the revaluation of real property. Commissioners have asked staff to prepare a budget based on a “revenue neutral” tax rate.

How would a “revenue neutral” tax rate affect my tax bill for 2009?
The impact will vary. If the town boards join the county in adopting a “revenue neutral” tax rate, all property owners will get some relief in that their tax bills will not be as high as they would without the new “revenue neutral” rate. However, the net impact on individual taxpayers will depend on how much their real estate property values changed due to revaluation and how the new tax rate affects their motor vehicle and personal property tax bills.

How were the new assessed property values determined?
The revaluation process is primarily determined by state law. During 2008, county appraisers visited all properties to verify and update the county’s property files. In some cases, they asked for permission to enter structures.

During visits, appraisers looked for changes in conditions, such as changes in outbuildings, neighborhood trends, condition of the property, location and property features. Other factors considered include local markets, recent sales of comparable properties in the area, and replacement costs. In the end, the appraised value should be close to current market value (the most probable sales price).

Comparable sales included all sales of similar or like properties within the same area of the county between January 2005 and December 2008, but some sales are excluded from consideration, such as foreclosures and sales between relatives.

Where can I look up tax records to review comparable sales near my residence?
The Tax Office maintains an online database of all properties. Click here to access online database. Use your name or address to locate a summary of your property tax record. From this view, select the “Sales” option on the right side of the blue menu bar at the top of the page to see a list of several comparable properties. To view details for each property, such as acreage or year of sale, select “Tax Card” in the main menu bar. To find additional comparable properties, search the database by street names in your community.

How do I decide if my new assessed valuation is too high?
Collect and evaluate any evidence that might indicate whether or not the county’s valuation is too high, such as:

A recent paid professional appraisal of the property (for refinancing, home equity loan, etc.);

A recent sales listing of the property at a different value;

Photos showing the condition of the property, including the outside and inside of any structures; and

Recent selling prices of similar properties in the area.

To appeal your county valuation, the evidence must show that the new assessed value is substantially higher than:

The property’s current market value; or

The values of comparable properties in the area.

What is the first step in appealing my valuation?
The vast majority of appeals are settled during this first step, the informal review. Within 15 days of receiving your new valuation notice, there are two options to appeal your valuation:

Return the Informal Appeal Form at the bottom of the notice (make sure you complete both sides of the form); or

Call 919-542-8262 to request an appointment for an informal review.

The review includes a meeting with Tax Office staff and may also involve an on-site inspection of the property. In April, you should receive written notice of the Tax Office’s decision.

What happens if I disagree with the Informal Review decision?
You may contact the Tax Office at 919-542-8262 to obtain a form to request a hearing before the county’s Board of Equalization and Review. You will choose from several dates that the Board meets to present your appeal. Copies of the Board’s decisions should be mailed out in May.

If you disagree with the Board’s decision, a third level of appeal involves the North Carolina Property Tax Commission. After this point, the only appeal option is the State Court of Appeals.

When must tax bills based on the new values be paid?
Tax bills will not be mailed to property owners until August 2009 and do not have to be paid in full until Jan. 4, 2010 without penalty.

What do I do if I have trouble paying my tax bill?
Some seniors (age 65+) and permanently disabled that meet income and residency requirements may qualify for a property tax exemption or deferment program. Disabled veterans (honorably discharged) also may qualify for a property tax exemption. For other questions about tax payment options, call the Collections Office at 919-542-8260.

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