It’s a misconception that property revaluations — like the one Wayne County just completed — are simply a way for the county to generate revenue.
State law requires each county complete a property revaluation at least once every eight years, said Wayne County Tax Administrator Alan Lumpkin.
“The law is very specific,” he said. “The goal is to bring everything to 100 percent market value. In doing that, we are checking sales, trends, things like that.
“In the last year and a half to two years, that is what we have been doing — looking at what the market is doing.”
Little change has occurred since the county’s previous revaluation, Lumpkin said.
People argue that the tax office puts so much money on the property, he said.
Lumpkin said that is not the case, and the tax office reflects what the market is doing.
“The market dictates what the values are,” he said. “We are required to reflect that market and put the tax value at 100 percent market value, as of this snapshot date of January 2019.”
The primary purpose of a revaluation is to ensure all properties are valued or assessed equitably, allowing the tax department to equalize the tax burden among all property classes.
For example, consider two residential properties, “A” and “B” that are similar but in different parts of the county. The county determined in its 2003 revaluation that both properties were worth $150,000 each.
In 2005, a new state-of-the-art school was built near property “B” and the area became a very desirable place to live, which in turn can drive up home values at a faster-than-normal rate.
In the 2011 revaluation, the county found that through sales property “A” is worth $175,000, but property “B” is worth $225,000. If not for the revaluation, both properties would still be paying the same tax even though property “B” is worth $50,000 more than property “A.”
The revaluation redistributes the tax burden to reflect the true market, Lumpkin said.
Another example could be that commercial properties increased 50 percent, while residential properties increased 20 percent. By conducting a revaluation, the tax burden can be distributed accordingly, he said.
Once the values are set, they remain the same for the next eight years, even as the market fluctuates.
The county is doing what a fee appraiser does when someone gets a loan from a bank, he said.
“We are just doing it on a mass scale,” Lumpkin said. “We are doing all 66,000 parcels in the county and not just one particular parcel.”
The county uses aerial photographs for open land and farms. Appraisers ride by properties to determine a value.
The tax office also depends on the public’s help by making the office aware of any additions or changes to property.
“A lot of times, a house can look average on the outside, but they may have remodeled on the inside,” he said. “It may be in bad shape on the inside. You can’t really tell so we rely on the public to tell us that information.”
All property owners have the right to appeal the new values if they feel they exceed true market value. Appeals should include recent appraisals or other documents relating to the condition or value of the properties and similar properties.
You should not file an appeal if you think the assessed value is about what you could sell your property for, Lumpkin said. Also, your ability to pay your tax bill is not a valid reason for an appeal.
The tax office is currently reviewing informal appeals, Lumpkin said.
The tax office or a second revaluation notice will be sent to notify people of any change in value as a result of an appeal.
People not satisfied with the results of the informal appeals may file for formal appeals with the Wayne County commissioners sitting as the Board of Equalization and Review.
Anyone still dissatisfied with the board’s decision, may file an appeal with the North Carolina Property Tax Commission and then on up to the state Court of Appeals.
The revaluation law also requires that a revenue-neutral tax rate be published — meaning the county would collect the same amount of taxes that it did in the current year.
The tax office does not set the tax rate, the county commissioners do.
Commissioners are not required to adopt a revenue-neutral tax rate, which in this case would be 64.98 cents per $100 value. The county’s original budget proposal kept the current tax rate of 66.35 cents per $100 worth of property tax value.
Doing so could mean a tax increase on average of about 1.5 cents.
“Everybody can’t take that number ... they can’t take that 1.5 cent increase and say, ‘That that is what mine went up or down or whatever,’ ” Lumpkin said.
“In other words, if I take last year’s pot of money that we billed and this year’s pot of money that we are going to potentially bill, that is the increase that we are seeing, but that does not mean that everybody’s (tax burden) went up the same amount of money or whatever. It varies from location to location.”
Commissioners in a split vote approved changing the budget to reflect a 1.5 cent increase.
However, that increase has been put on hold until County Manager Craig Honeycutt determines if the money the increase would generate can be found elsewhere in the budget proposal.
No decision has been made on the rate.