|It's that time again; believe it or not, it has been three years since we completed a county wide reappraisal. Those of us who work in the assessor’s office think about reappraisals and assessments all the time, but for those who only get exposed to it every three years it can be confusing. The following are some of the common questions I hear when we mail notices of change in assessment.
How did you determine my value?
The values placed on property are determined by a three step process. First we send qualified appraisers out into the field to gather data on all the property in the county. They measure and sketch all the buildings, as well as determine the condition and quality of construction. They also capture any other value related characteristics such as heat and air conditioning, insulation, bathroom counts, and that sort of thing. As you might guess this process takes a very long time.
Next, all the field data is entered into our computer so that all of the property descriptions can be catalogued and used. The Sebastian county residential property record card has over 300 fields of data that we use to describe every house, and our commercial property record cards have more than twice that number of fields. All of that data can be extremely useful once it gets organized by our software.
Finally, once all of the data has been entered into the computer we examine every sale that occurred over the course of the year 2009. We use 2009 sales to determine the value of all property in the county as of January 1 2010. We examine these sales very closely to determine their validity. This is an extremely important part of the process because these sales are what we use to calculate the value placed on the majority of the property in the county. We only use sales that are typical market value sales. We do not, for example, use sales that are owner financed (they are usually higher) or that occur between related parties (they are usually lower) or any other non typical type sales. Some of you may have participated in the validation process when you filled out the sales questionnaires that were mailed to every property owner that bought property over the last two years; if you filled out the form and mailed it in, we used that data to determine the validity of your sale. Once all the sales are validated, we use the good, market value sales to determine the value of similar properties in similar neighborhoods. The value placed on your property was based on typical selling prices of properties like yours or in similar neighborhoods. In the year 2009, there were literally thousands of sales that occurred that helped us determine property values.
What about the housing market, hasn’t the real estate market crashed?
Parts of Sebastian County have seen some slow down in value appreciation at the end of 2008, and some have not. Because we use actual sales to determine those values, any appreciation or depreciation will be reflected in the values placed on all property. It is important to remember that our overall market has grown some since we last placed values in 2007, few property values actually went down from the 2007 levels. We have been extremely sensitive to the current market situation when placing values on the property, and though Sebastian County never saw the huge market bubbles that were generated in the major metropolitan areas around the country (some climbing hundreds of percentage points a year), we are fortunate not to see the huge crashes that those areas are dealing with now. One thing is certain; all of the values placed on the properties in our county are based on actual sales activity that occurred in 2009. If the market did go up or down, it has been reflected in the values placed on all the properties in the county.
How will I know if my property value has changed?
Over the next couple of weeks, all taxpayers that have experienced an increase in their property value will be notified by mail (those properties that had no change or went down in value will not be notified). The “notice of real estate value change” will have several numbers that will help you understand your valuations.
· Previous Value: The current full appraised value of the property described on the notice. This is in most cases the value placed on the property in 2007.
· New Value: The current full appraised values of the property based on current market conditions.
· Taxable Value: The value used to calculate taxes due in 2011. This number includes all caps and freezes that apply to the property. This number multiplied by the millage rate is used to calculate your taxes.
· Estimated Tax Change**: This number is calculated by using the current taxable assessment and applying the current millage rate and calculating the difference in current taxes and estimated taxes. It is important to remember, the millage rate could change if there is an election or action by the Quorum Court.
It’s also important to remember that the notice includes the phone number of the appraisers that have calculated these values. If you have questions about the value placed on your property, feel free to call them so they can help you understand your value.
What are the results of the reappraisal? As a general rule, most of our properties went up some. It is important to remember that these changes occurred over the course to the last three years, and that the values placed in the last reappraisal were determined using sales from the year 2006.
Properties in Fort Smith went up an average of 3.56%. Of the 28,367 residential parcels 15,424 of them went up, 11,229 went down and 1,714 remained unchanged
Properties in Greenwood went up an average of 12.59%. Of the 3,669 residential parcels 2,678 went up, 560 went down, and 431 remained unchanged
Properties in Lavaca went up an average of 7.43%. Of the 463 parcels, 296 went up, 59 went down, and 108 remained unchanged.
Properties in the rural varied by school district but generally went up an average of 5%
Overall our county values went up an average of 5.3%. Of our 50,164 residential parcels 29,261 went up, 16,242 went down, and 4,661 remained unchanged.
How are property tax proceeds used?
property taxes have been around a very long time. They are used to fund our county government, public schools. The county uses the proceeds to provide all of our county services, and pay its employees. Of course the majority of the funds go to public schools. Property taxes provide an excellent funding mechanism for these services because they are generally very stable. Because our taxes are calculated in one year, and collected in the next, schools and county government can reliably budget for the upcoming year.
What about tax relief?
There are several different forms of tax relief that the law provides for us to use. These limitations help keep tax bills stabilized from year to year, as long as the property does not have any newly constructed items that were not previously on the assessment records.
· $350 tax credit- This credit is applied to the end of the tax bill. It applies to all property that is owner occupied and serves as the principle place of residence for the owner. The credit is only good for homestead real estate, and is good up to $350. If your tax bill falls below $350 you will only receive enough credit to cover the bill.
· Limitations on assessment- there are several assessment caps intended to help taxpayers keep a stable tax bill through the real estate market ups and downs.
· 5% cap applies to all homesteads that act as principle places of residence, and are owner occupied. Assessment values for calculating taxes can only increase 5% on those properties per year, provided there has been no new construction to the property.
· 10% cap applies to all property that does not serve as principle place of residence. Assessment values for calculating taxes can only increase 10% per year, provided there has been no new construction on the property.
· Freezes- taxpayers that are over 65 or disabled have their assessments for calculating taxes frozen provided there has been no new construction on the property. These freezes stay in place until the property sells.
These tax relief items are in place to help taxpayers keep taxable assessments under control. There are a few things that will cause the assessment limitation caps to be removed, including when the property sells, and if the property has any new construction. Other than that, the caps should remain in place on each property that experiences an increase in value. It is important that taxpayers have the correct information listed at the assessor’s office. All taxpayers should check their notice to make sure they are receiving the proper credit for owner occupied property and those that are disabled or over 65.
This time of year, we understand that most people are confused by the property tax system. Though it is the only true “flat tax” it can be difficult to understand the tax relief measures in place to help keep our taxes reasonable and fair. We are sensitive to these issues and encourage you to call if you have any questions regarding your notice. Our appraisers are well qualified and will do their best to help you understand how the values were calculated.