2/29/20: DARE’S 2020 PROPERTY REVALUATIONS: SOUTHERN SHORES AVERAGES AN INCREASE OF 20 PERCENT OVER LAST YEAR’S VALUES; PLUS HOW ‘REVENUE-NEUTRAL’ TAX RATES WORK AND DECIDING WHETHER TO APPEAL

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The Beacon is hearing from homeowners in the Southern Shores woods that their 2020 revaluations are running about 25 to 35 percent above last year’s property values.

Southern Shores is abuzz with talk of the new, higher-valued property assessments sent by Dare County to property owners last week, and so is The Beacon.

Since the County’s Feb. 25 mailing of the revaluation notices, The Beacon has heard from Southern Shores property owners about increases in value ranging from 1 percent (a vacant lot on Duck Road) to 36 percent (a developed property in the woods). We have not interviewed, nor have we been contacted by, anyone whose property declined in assessed value or increased precipitously.

According to the Dare County Assessor’s Office, the total assessed value for taxable real-estate parcels in Southern Shores increased 20 percent over last year’s total value. In 2019, 2,945 real-estate parcels in Southern Shores were assessed a total value of $1,314,249,700. This year, 2,943 parcels were assessed a total of $1,574,737,000.

Until this year, Dare routinely observed the state-law requirement of counties that they conduct countywide property revaluations at least every eight years—the last one having occurred in 2013. This time the County opted to go with a seven-year cycle, which the law permits it to do.

Taxpayers have 21 days after the date of the revaluation notice—i.e., until March 17—to note an appeal of any reassessed property value by mail, online, or in person. According to the County, hearings of “informal appeals” before certified real-estate appraisers on staff will begin March 10.

If you disagree with the result at the informal appeal level, you have the right to appeal to the Dare County Board of Equalization and Review, which is a five-member citizens’ committee appointed by the Dare County commissioners. The County will mail property tax bills in July.

The County has determined that there are three reasons for appealing a new assessment. They are:

  • The assessed value is significantly higher or lower than the actual fair market value of the property.
  • The assessed value is based on inaccurate data.
  • The assessed value is not equitable when compared with similar properties.

HOW THE REVALUATION AFFECTS COUNTY AND TOWN TAX RATES

In deciding whether to appeal a higher property value, taxpayers often wonder how much more they will have to pay in property tax, i.e., what will happen to the county and town tax rates as a result of the revaluation.

Local governments in North Carolina are required by state law to establish “revenue-neutral” property tax rates during the year in which a general reappraisal of property occurs, but they are not required to adopt them.

According to the law (specifically, N.C. General Statutes sec. 159-11(e), the revenue-neutral rate, abbreviated as RNTR is “the rate that is estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced for the next fiscal year by the current tax rate if no reappraisal had occurred.”

Because of revenue-neutral rates, Town taxpayers may not see much of an increase in their tax bills for 2020. But you cannot assume that your tax liability this year will be the same as last year. That’s not how revenue neutrality works.

The RNTR refers to the aggregate tax burden for a jurisdiction (county or town), not the tax burden for individual taxpayers. If a taxpayer’s real property appreciated in value more than the county’s or town’s real property in the aggregate, then that taxpayer will pay more if the RNTR is adopted.

A taxpayer’s bill also will increase if “that taxpayer’s proportion of real property to personal property is greater than that for the jurisdiction as a whole,” according to the UNC-Chapel Hill School of Government. (We defer to the School of Government for an excellent explanation of the RNTR and how it affects individual taxpayers. See: https://canons.sog.unc.edu/the-revenue-neutral-tax-rate/.)

Further, the state statute requires only that a local government budget officer “include in the budget, for comparison purposes, a statement of the revenue-neutral property tax rate for the budget.” The local government must calculate and publish this rate, but it need not actually adopt it for the next fiscal year.

Dare County’s RNTR will be established by July 1, the start of the new fiscal year, but the rate will be known before then. The same is true of the Town of Southern Shores’ RNTR.

The first of two fiscal year 2020-21 budget workshop sessions to be held by the Southern Shores Town Council is scheduled for March 24, 9 a.m., in the Pitts Center. The second one will be April 21, at the same time and place.

APPEALS OF PROPERTY REVALUATIONS

The conventional wisdom has long been that in order to argue effectively on appeal that your property has been valued incorrectly—typically, much too high—you have to have comparable property sales to bolster your case. That means contacting a real-estate agent and asking him or her to run down “comps” for you.

For your convenience, Dare County has made available online the comp data that it considered in its revaluation. It now provides “Comparable Sales Search” links for either vacant or improved residential properties. See https://www.darenc.com/departments/tax-department/2020-revaluation.

As an advocate who has argued successful appeals, I would advise that these links are a good place to start, but you should do more research. Contact your own agent for a comp search—it might turn up other comps in your favor—and tell that person all of the factors that you believe distinguish your property from others that the County considered in comparison.

Location—for example, whether it is oceanfront/soundfront/canalfront or not—is not everything. Nor are the year of construction and the square footage of the house. There are lots of apples and oranges in comparable sales. Think in particular about the condition of your house vis-à-vis the condition of comp-sale houses. In the event of a sale, is your house likely to be torn down and replaced and, therefore, be of lesser value than the County considers it? That’s important.

Generally speaking, what is different about your house and real property? To argue that your house has been significantly over-valued, you should be able to identify variables that make your house less desirable than the comparable sales in the same general area. The same is true of the land on which it sits.

The County has aerial photographs of the exteriors of residences; it does not know about the sagging foundation, the cracked walls, the outdated plumbing, the circa-1975 kitchen, etc., etc., and other drawbacks of your house’s interior.

How many bedrooms and bathrooms does your house have in comparison to the comps? Is the number a hindrance or a help in the event of a sale?

The County also does not know about any sale encumbrances or restrictive covenants that may be in your property deeds.

I am a big believer in arguing an appeal in person, not by mail or online. When you make your case only in writing, you are making it before a theoretical decision-maker, an unknown quantity, a non-person, if you will. When you sit across the desk from an appeal examiner/appraiser, you know whom you are addressing and, in fairly short order, you will know something about the way that person thinks. His or her questions alone will give you an idea of which factors will be dispositive of your appeal and which factors will not. You will know what to emphasize.

(Of course, you need a good argument, to begin with. If you think you can just wing it and hope for the best, you should stay home.)

A favorable interpersonal dynamic also may come into play in disposition of your appeal, if you actually speak with someone. It will never have an influence, if you just download your documents online and contact no one personally.

Of course, if you are prone to losing your cool, you may lose points in an in-person appeal. I have seen people storm angrily out of appeal hearings—which is a sure way to lose. Courtesy is vitally important. If you know that you are likely to come across poorly, ask a spouse or other household member to handle the appeal.

MORE DATA FROM DARE COUNTY’S REVALUATION

You may be interested to know that Wanchese, which is a “census-designated place” on Roanoke Island, not an incorporated town, and Mashoes, an area that The Beacon believes is near Manns Harbor and has only 51 property parcels, had the highest percentage increases in total assessed value at 47 percent and 52 percent, respectively.

According to the County, the total assessed value of properties in Duck increased 16 percent from 2019 to 2020, and the total value in Kitty Hawk increased 27 percent.

In 2019, Duck had 2,749 parcels assessed at a total value of $1,568,779,000; in 2020, it had the same number of parcels assessed at $1,821,595,800. In Kitty Hawk, the 2019 numbers were 3,629 parcels at $1,074,521,500, and the 2020 numbers were 3,633 parcels at $1,363,586,700.

Countywide, according to the Dare County Assessor’s Office, the percentage of change from 2019 values, was as follows:

1) A decrease: 5 percent of all parcels

2) 0-30 percent increase: 49 percent of all parcels

3) 30-40 percent: 18 percent of all parcels

4) 40-50 percent increase: 12 percent

5) More than 50 percent increase: 16 percent

The County also looked at single family residences by area and land type, the latter of which it separated into four categories:

  • Non-influence
  • Sound/canal
  • Ocean influence
  • Oceanfront

In the area it designated as “northern beach”—which it distinguished from Hatteras Island, Roanoke Island, and Mainland—the overall percentage change in value for “non-influence” property was 36 percent; for sound/canal property was 24 percent; for ocean-influence property was 22 percent; and for oceanfront was 29 percent.

We will endeavor to read more about the County’s revaluation process in the coming weeks and report on salient details. You may access its 195-page, how-to report here: https://www.darenc.com/home/showdocument?id=5859.

For general information about the revaluation, see https://www.darenc.com/departments/tax-department/2020-revaluation.

COMING TOMORROW: A report on last Thursday’s meeting between the Town’s exploratory committee on cut-through traffic and representatives from the N.C. Dept. of Transportation.

NEXT WEDNESDAY: The Town Council meets for its regular monthly meeting at 5:30 p.m. on Wed., March 4, in the Pitts Center. You may access the agenda and meeting packet here: https://www.southernshores-nc.gov/wp-content/uploads/minutes-agendas-newsletters/Meeting-Packet_2020-03-04.pdf.

Ann G. Sjoerdsma, 2/29/20

 

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