September 12, 2007 News & Views » News Feature

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The Tax Man Cometh 

Understanding why property evaluations may seem so screwy

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click to flip through (2) KAREN SHUGART - Built in 1999, this north Mecklenburg County home has 1,320 heated square feet and is valued at $88,600 for tax purposes. Its land is valued at $18,000.
  • Karen shugart

  • Built in 1999, this north Mecklenburg County home has 1,320 heated square feet and is valued at $88,600 for tax purposes. Its land is valued at $18,000.

 

Mecklenburg County tax bills went out last month, leaving many property owners scratching their heads. Just where does this stuff come from? A look at property records yields valuations that don't always exactly seem to make sense. Eric Anderson, Mecklenburg County's assistant assessor, explains why many home values might be far less -- or more -- than what you may think. The following interview was edited for clarity and space.

Anderson: The last county wide reappraisal in Mecklenburg had an effective date of January 1, 2003 ... This is well into the second half of 2007, and it's been quite a while since the last go around. The fact that some neighborhoods would be significantly more in value than the tax records doesn't surprise me at all ...

Most places appreciate over time, and some neighborhoods appreciate more rapidly than others. But one thing is sure: Over time, our estimate of market value becomes inaccurate as times go by and conditions in the market change. That's why you do revaluations periodically. We're scheduled to do another one for January 1, 2009, so we're sort of beginning to work on that as we speak.

What we'll be looking at, as closely as possible, is market conditions in the last half of this year and first half of three-quarters of 2008.

Creative Loafing: How much of the appraisal process is driven by computer versus human evaluation?

It's a tough question to answer, but I would say that it's a nice synthesis of both. In a county our size, which is upwards of 250,000 parcels of real estate and a staff of 30 or so, we have to take advantages that computer-assisted mass appraisal systems allow ... but you never take away from the process the human element. We have appraisers who are given geographical areas of responsibility -- that's their duty to analyze the market and make adjustments to the assessed values to reflect market conditions in every revaluation and defend those values as well.

Is it more of an art or a science?

It is definitely both.

Someone who looks at someone's tax value a couple of streets over and says, "That can't be right; someone must be paying somebody off." Are there protections against activity like that?

... Anytime a change is made to any value, there is an electronic paper trail associated with that ... every taxpayer has the right to appeal a property between January 1, and May 15 roughly, which is the date of the adjournment of the Board of Equalization and Review. The only thing they have to be mindful of is, that regardless of what the year happens to be, the schedule of values to be considered and the elements of value to be considered have to be relevant to that January 1, 2003, effective date.

[Say] you build a house in 2006, you paid $200,000 for it. But if the other houses in the neighborhood that were there in 2003 would have been valued at $150,000 for example, that's where this one goes on, even though it's brand-new. It's equitable at that point.

Can people complain about other people's evaluations?

That's done on occasion, yes. There's nothing that says they can't do that. From time to time we do receive information about improvements that were made to a property that we're not aware of because maybe they haven't taken out a building permit.

If you picked up a building and put it in a less-desirable or more-desirable neighborhood, would that change the value of the building or is the neighborhood's value included in the land?

Typically location is reflected in the land value, but I can't say in every instance that's going to be the case. Let's say you put that house in this neighborhood would be worth "x" and you build the house next to a gasoline processing plant or some sort of a negative external influence, well, that's going to affect the land and the building.

One house in the Foxcroft neighborhood has about 3,700 square feet. It was built in 1955, but its building assessment is $77,000 for the structure and $300,000 for the land. I was surprised that a home in that neighborhood would be assessed $77,000.

That doesn't surprise me at all. You see this at a lot of close-in neighborhoods as the desirability of the neighborhood increases to a point where older homes are being basically knocked down and new much grander structures. As the land value increases, the older home's contribution to the total decreases. You can only have a total value that's within the range for the neighborhood, and if sales of other tear-down structures sort of dictate what the land rate is going to be, an older home with lots of obsolescence can contribute less to the overall [value] than you might think if it were located elsewhere.

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