April 5, 2024 | Keith Shearon
Alice Miese was shocked. She opened her new property statement in March and found the tax value of her modest 1,370 square foot home had doubled, from about $158,000 to more than $333,000. She lives in the country. It’s a little place. How could this be?
Digging deeper, Alice noticed a large contributor to her new tax problem was the lot valuation by Pearson’s Appraisal. They valued the lot alone at $50,000, a number far beyond what the developer paid and baked into the purchase price of her home. But why?
Because Alice lives in a modest subdivision, appraisers value her property higher. The development isn’t fancy. There are no special amenities like a swimming pool or tennis courts. It’s just a small subdivision out in the county. And in addition to the jacked up lot value, the appraiser applied a 1.5x multiplier on the whole appraisal. Her goose was cooked.
April Fools or not, those price increases and increased tax valuations are no joke. The greatest shock was realized by small homeowners. A large reason for this is the great influx of wealthy people from outside our area, trying to establish homes. Some of the folks bought land or homes without ever even seeing the property. Others paid premiums of $30-$50,000 over asking price just to buy a small home in the area.
By now everyone is very aware that tax property values in Granville County have increased significantly over the last eight years. This increase should come as no surprise given the amount of growth in the Wake Forest, Raleigh, and Durham area since 2015. Making matters worse, the devaluation of US currency from the national government’s inflationary spending makes property value’s even more painful. Low and moderate income families will have higher tax burdens because wealthier people are scooping up homes and inflating home prices.
Low and moderate income families will have higher tax burdens because wealthier people are scooping up homes and inflating home prices.
The tremendous growth in home prices caused Granville County government to realize that property tax valuations for Granville County homeowners were grossly lower than sale prices. According to County Manager Drew Cummings, some home values were found to be valued as little as 60% of their market value during the 2023 revaluation process. Alarmingly, Pearson’s Appraisal Service, selected to perform the revaluation by the county, said in a public meeting on April 1, 2024 that small homes have been hit hardest.
The effect of these valuation increases probably will not be felt in 2024. Granville County Commissioner Russ May promised, that in spite of substantial increases in property value, Commissioners will lower the tax rate for real property such that the taxes levied in 2024 will be pretty much the same in 2024. Of course the real threat comes from what will happen to gradual increases in property tax rates in the coming decade.
There’s not much that homeowners who want to live within 50 miles of the Raleigh Durham area can do about this situation, except to follow the steps below.
Take the new valuation letter you received in the mail and make an appointment with tax office to review the new valuation of your property. Use the County appeal process form.
Do it soon. There is an April 29 deadline to file a rebuttal with the tax office over your new evaluation. There is a June 3, 2024 deadline for the county tax office to settle any disputes with the residents. Do not delay in making an appointment and meeting with the Granville County Tax Office.
Unfortunately, even though Granville County has given you an extended rebuttal period, they have not provided tools by which you can establish the real value of your property. You only have one approach that you can take, and that is to:
Respectfully, demand that the tax office and appraisers provide to you all of the paperwork showing how they arrived at two things. First comparable valued homes used to set your property value, and second you need to question the multiplication factor that has been applied to your property. Make sure the comparable properties are very closely matched to your own in type and location. Make them show you the amenities that make your multiplication factor justifiable.
Generally speaking, if you live in a subdivision it is assumed that the subdivision provides you additional value, and that additional value increases your property value. But there are a number of subdivisions in Granville County that provide no additional amenities compared to someone else that built a house on any country road. If you live in such a subdivision and have a small home, you should make a determined argument against a multiplication factor greater than 1.04.
If you live in a neighborhood that has numerous amenities and you have one of the smaller houses you’re probably going to have a difficult time making the case to reduce the multiplier on your property. If you live on a country road, your multiplication factor should be about 1.04.
The biggest argument that you can make is to demand comparative property values, ordinarily comparative values, or comps as they are called, need to come within an area 3 to 5 miles from your home. But “mass appraisal companies” sometimes try to look far and wide to find something like your property. If their comp is further away, argue for a lower valuation.
Standard 6 of the USPAP Appraisal guide says communication of findings, reporting the facts as they are found, is a standard practice. Ask for specifics about ALL the facts of your revaluation. Ask them to explain specifically to your property how and why comps and multiplication factors were applied. If they just say they made assumptions, that may not meet the requirements of the standard.
You may find that Pearson could not find many or any comps for your property. Keep in mind that mass appraisers usually never set foot on your property and never actually look at your property to determine the value. They just look at the information on file with the tax office. Request appraisers come and look at your place personally and make a real assessment, not just subject you to assumptions. Keep in mind, that a second, specific appraisal could result in them raising your value and not lowering it, so be careful what you request.
If we are going to be realistic we have to realize that prices are going up and will probably continue to go up. So saying that your house should not increase in value at all from one 8-year valuation period to the next is probably an unrealistic argument. But if it has gone up by an unreasonable number, you should make a determined argument.
Some advocates for revaluation of real estate will make the argument that homeowners “benefit” from an increase in equity of their homes, their home is worth more, therefore the homeowner has benefited from an increase in value. But in reality, there are only two ways to take advantage of this “benefit” from an increase home value. One is to sell the home and reap the profit. The second is to borrow money against the increased value of your home using a home equity loan. Neither idea may seem palatable to most people.
As a last ditch effort, if your rebuttal to the county fails to get them to give you a realistic property valuation, you can pay to have a private appraiser put a value on your property. In all likelihood, this will cost you between $300 and $500 per appraisal. If the private appraisal finds that the county appraisal of your property is accurate then you’ve wasted the private fee. However, if the appraiser finds the value of your property is more than 5% lower than the county’s number, the private appraisal may be justified.
Remember, the County Manager suggests you not spend money for a private appraisal. He suggests you make an appointment to appeal your case at the Tax Office. This would be a good first step.
Something is probably broken in the tax system when the people with the least expensive properties have their taxes raised significantly more than wealthy homeowners.
One of the things the county might consider doing if TAXPAYERS and VOTERS apply enough pressure is to use the multiplication factor on the property to lower values of homes for people of limited financial resources. In other words, instead of the County just using the multiplier to increase your real estate value, make the case to lower your taxes by arguing that the same factor could be used to make adjustment based on your ability to pay a higher tax.
The last recourse you have is to elect County Commissioners that have your interests at heart and will keep your government and your taxes small.
Appeal you valuation ASAP
https://www.granvillecounty.org/government/tax-department/reval/
https://www.granvillecounty.org/2024/01/30/2024-tax-revaluation-information/