Property Taxes, Appraisals, and You: A Quick Guide to Property Tax Valuation

The 2019 Property Reappraisal is well under way in Gaston County! The County reports that homeowners and property developers should receive updated property valuations around mid-February 2019. These valuations are important because they tell the county how much your property is worth, and that determines the amount you pay in property taxes. The Property Reappraisal may also affect what your house may sell for, or the amount a bank might lend on the property. What does a homeowner or business owner need to know about the 2019 property valuation?

How is property valued?
Every county has appraisers who look at the market value of homes and commercial properties. Market value means the true value of a home or commercial property if it were sold today. The appraisers look at a number of factors: location; age; size; type of buildings on the property; cost for replacement; or any income a property may produce. The appraisers do not have to use all of these factors to decide on a property’s true value but can make the final decision using any combination of them. Recently, Gaston County has used a “mass appraisal” process where all properties in the County are separated into like groups (such as single family homes, apartments, commercial, manufacturing, etc.) for establishing a base value, and the appraisers then make adjustments to the base value based on age, condition, location, and similar factors.

What should I look for when I receive my new property appraisal?
Under North Carolina law, real property tax valuations are presumed to be fair and accurate. A property owner cannot appeal a valuation simply because their property’s tax value increased or decreased. Rather, to overcome the legal presumption, the taxpayer must show that the appraisal method used by the County was arbitrary or illegal and that the tax assessment is substantially greater than the property’s true value. Demonstrating that the tax assessment is “unreasonably high” can also satisfy the second part of the showing. A lawyer knowledgeable in real estate or tax issues can assist you with reviewing your tax valuation and options for challenging the appraisal.

What steps can I take to show my property appraisal is unreasonably high?
Property owners who believe their properties are incorrectly valued can petition the local and state government for relief. In Gaston County, the initial appeal is heard before the Gaston County Board of Equalization and Review, an appointed local Board which reviews the assessment, hears from the property owners, and issues a written finding. Property owners can appeal the decision of the Board of Equalization and Review to the North Carolina Property Tax Commission which sits in Raleigh.

Do I have to have an attorney or an expert witness to appeal my tax assessment?
A property owner is not required to be represented by an attorney in a property tax appeal and is not required to hire an expert to testify about the value of the property. However, both the local Board and the Property Tax Commission have filing requirements and deadlines which must be met. In some cases, testimony from a real estate appraiser as to the value of the property and the appraisal method is helpful, and may be necessary depending on the complexity of the issues involved. Again, a lawyer with knowledge of Property Tax Commission matters can help with the assessment of an individual case and procedural requirements of an appeal.

Conclusion
Periodic property revaluations are essential to the functioning of local government and its need to provide essential services, but can be very stressful for individual businesses and families, particularly in areas of rapid growth. Engaging knowledgeable attorneys and appraisers to evaluate reappraisal issues can provide help with the uncertainty associated with a revaluation and in some cases relief from the burden of an overvaluation.

MHC’s Real Estate Litigation Group consists of John Russell, Jane Painter, Nancy Paschall, Amelia Lowe, John Hasty, and paralegal Vickie Wiggins. For further assistance or questions, please feel free to contact our office at 704-864-6751.