Values, not necessarily taxes, to jump with Polk revaluation
Published 1:40 pm Tuesday, March 18, 2008
The county&squo;s revaluation, expected to provide a complete record of the size and quality of all structures, is proceeding on schedule. Field work to survey residential properties is expected to be done next month, the same work on commercial properties will begin soon, and notices of the new property values could go out in late December or early January, according to the Polk tax office.
For many people, their new property values are sure to be a lot higher than they are now. Even if the real estate market has cooled a bit recently, most property values are substantially higher than they were in 2001, the last time the county did a revaluation.
&dquo;There will be some sticker shock,&dquo; says Polk County tax assessor John Bridgers.
However, that doesn&squo;t mean the revaluation will result in higher taxes for everyone. Tommy Melton, chairman of the Polk County Board of Commissioners, says the county likely will try to make the rise in tax values &dquo;revenue neutral,&dquo; meaning the tax rate would be lowered to offset the higher values. The county would end up taking in the same amount of property tax revenue as it did before the revaluation.
Melton says the county board will need to review the exact figures from the revaluation prior to adjusting the tax rate next spring. But he says it&squo;s his goal, and he believes it&squo;s also the goal of the other commissioners, to make it revenue neutral.
Even if the county does make it revenue neutral, the impact on property owners will vary depending on how much their individual properties have appreciated. Owners of property that appreciated the same as the average appreciation for all Polk properties, will see no rise in taxes. Owners of property that rose in value more than the average will see higher taxes, while those who own property that rose less than the average will see lower taxes.
The purpose of the revaluation is to ensure everyone is paying their share in property taxes based on current values.
&dquo;Really, it&squo;s a matter of being fair,&dquo; says Bridgers. &dquo;But it&squo;s not someone&squo;s property value that determines their taxes, it&squo;s the tax rate.&dquo;
Full list and measure
Bridgers says this year&squo;s revaluation is different than the last one in that it&squo;s a &dquo;full list and measure.&dquo; That means the company performing the revaluation is visiting each property and recording the dimensions and construction quality of every structure.
He says that wasn&squo;t done for the last revaluation, which used a more general survey of properties, perhaps from the road sometimes, to see if structures appeared to fit with the county&squo;s records. This revaluation, he says, will make sure the county records are accurate.
&dquo;They didn&squo;t do (a full list and measure) last time to make sure what we got on the tax cards matches what&squo;s sitting on the ground,&dquo; he says.
This revaluation also will allow the county to catch up with some new trends in local building. The county has seen a surge in upscale residences and other structures, including barns, over the past several years.
The county plans to use the revaluation to more accurately reflect values for those structures. For instance, the county plans to add a category of &dquo;equine facilities&dquo; for structures that until now have been listed under barns, but are worth far more than average barns, say county officials.
Currently, the county can only go by the categories and values set in the last revaluation, so such structures are listed under barns. Even listing them under &dquo;good&dquo; with an &dquo;A&dquo;
grade for construction, the county still can only assign a maximum value of roughly $40 per square foot for those structures. Yet county tax officials say some equine facilities in the county are built for well more than double that rate.
Tax assessor Joey Cabaniss says there are currently 14 riding rings in Polk County, including one built for about $1 million, and numerous upscale facilities for horses that can cost about $15,000 per stall to build. He cites Morton buildings as an example of higher quality equine facilities that don&squo;t fit in the current barn category.
Cabaniss emphasizes that after the current revaluation the county will continue to put what it considers to be a typical barn&bsp; in the barn category. But he says higher end structures for horses will go in the &dquo;equine facilities&dquo; category, and owners of those properties are likely to see much higher values.
Terraces, outdoor fireplaces
As examples of other new building trends, Cabaniss says the county is seeing more outdoor living areas, including outdoor fireplaces and cooking facilities. The county will try to establish values for those with the new revaluation, along with more finished basement levels of houses.
The county plans to put basement levels that are finished with the same quality as the main floor of the house in a new &dquo;terrace level&dquo; category.
County tax officials say they&squo;re also seeing more houses that have an overall higher quality of construction. The county currently has a base rate of $62 per square feet for residences, but some houses are being built for far more than that, particularly at upscale developments, such as Bright&squo;s Creek and White Oak.
&dquo;We&squo;re faced with some challenges to recognize some new and different things being built in our county,&dquo; says Cabaniss.
Schedule of values
The county expects to have a much more accurate schedule of values for all structures following the current revaluation. The schedule of values provides a value per square foot for the various quality levels of construction.
Bridgers says the previous schedule of values was taken from another rural area that was considered to be similar. But as he points out, Polk County is not like every other rural area, as reflected by some of the more upscale barns here.
The county plans to have a new schedule of values completed for county commissioners to review possibly this August.
A period for public comment and appeal will follow the release of the new schedule of values in the summer. Once the schedule is finalized, the tax office can begin putting together new tax value notices for each property. Property owners will have a chance to appeal the values informally by talking to the tax office or the revaluation company. If they are not satisfied, then can pursue a formal appeal before the county&squo;s Equalization and Review Board. A further appeal would go to the state&squo;s property commission.
Bridgers advises property owners may want to carefully consider whether to appeal a tax value. He says, the appeal process could give officials a closer look at their property and result in a reduced tax value, no change at all, or even a higher tax value.
The county plans to conclude the appeal process during the winter and spring of 2009, and the new tax bills will go out in July of the 2009 fiscal year.
Impact on new houses
Bridgers says he expects the new property values may draw complaints from some people, including those who recently built new houses. The tax value of a recently built house could jump significantly in the 2009 revaluation even if it was completed as recently as last year or even this year.
That&squo;s because the value assigned to new houses completed since the last revaluation was based on the schedule of values approved in 2001. So even a house completed this year is valued based on the going rate for new houses seven years ago. When the new
schedule of values comes out with the 2009 revaluation, those houses will be valued based on current construction rates, which are expected to be considerably higher.
Four years next time
By state law, the county is not required to conduct the next revaluation for another eight years, or until 2017. But the county probably won&squo;t wait that long, according to Bridgers.
Because the county is doing a full list and measure this time, he says the county should have much more accurate records, making the next revaluation much easier.
The county may opt, he says, to do the next revaluation in four years, an option pursued in many areas, particularly those that see significant changes in property values over a relatively short period of time.
Bridgers says the law requiring revaluation every eight years was created in the 1970s when values were not rising as quickly in North Carolina.
Conducting a revaluation every four years helps counties ensure that property owners are paying their fair share of taxes based on the latest values. Bridgers says&bsp; more frequent revaluations also help reduce the sticker shock for many property owners.