Home appraisals underway for what could be a significant property tax increase in 2019

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As the real estate market has boomed, Charlotte homeowners have enjoyed watching their home value steadily tick up.

But that rise will soon have a major effect on our tax bills — and then people won’t be quite as happy about the major increases in what the government says their property is worth.

Mecklenburg County is currently preparing for the 2019 revaluation process, when it will set new prices for what each property in the county is worth. This is the value the county uses for property taxes.

2019 might sound far off, but it’s not. Appraisers are already on the ground and have visited tens of thousands of properties.

County commissioners will spend the summer and fall of 2018 setting policy for what they’ll do with the numbers. Homeowners will get letters with their new values in January 2019 and pay at that rate the same year.

Higher values don’t automatically mean higher taxes. But a significant tax increase will certainly be on the table.

This will be the first time the county goes through this process since they botched it in 2011.

That year, thousands of people — primarily in suburban areas of the county — complained that their assessed value came in too high. An army of appraisal consultants had to be called in and millions of dollars refunded.

State law requires counties to gauge the value of all the properties in its jurisdiction at least every eight years.

When things finally shook out in the 2011 process, values went up by about 11 percent from the revaluation before that in 2003.

For 2019, the figure could be several multiples of that.

The home price index is up about 50 percent and residential price per square foot was already up 42 percent last year.

From a presentation by the Mecklenburg County assessor’s office

The rise is even more dramatic in other types of property. Commercial prices are up 101 percent and retail up 77 percent, according to Marvin F. Poer and Co.

With values rising that much, Mecklenburg County is preparing to hear from between 45,000 and 55,000 property owners questioning the prices.

The county is hoping to be on firmer footing with more accurate valuations than the last time it went through this process.

What happened last time?

In 2011, Mecklenburg County embarked on its standard revaluation, the first since 2003. As you may recall, a lot happened in the economy during that time period.

At that time, Charlotte was firmly in the grips of the Great Recession and the housing market was near its bottom.

But when homeowners were notified of their new assessed values, they got sticker shock. More than 40,000 property owners appealed their valuations, saying they were too high.

The situation was bad enough that the state legislature passed a law requiring Mecklenburg County to do the whole thing over again, contracting with Pearson’s Appraisal Services to re-evaluate all of the county’s 340,000-plus properties.

It took until early 2016 to get it all fixed. In the end, the review shaved about $1.5 billion off the total assessed value. One in four properties had their valuations reduced. Nearly $61 million was refunded. Taxpayers had to pony up $7 million to Pearson.

That screw-up sparked a flurry of changes for this time around.

The county assessor’s office has outlined a significant number of tweaks. Here are some of the big ones.

1) A better online system for appeals and disputes.

2) More staff. This year’s budget includes $731,000 for 14 new permanent positions and $948,000 for temporary staff.

3) Better communication. The county is spending $130,000 to put together a comms plan, including how to get homeowners to understand what neighborhood they’re in.

4) A simpler grading system used to identify the quality of a building.

Mecklenburg County will also, after this year, move to a four-year cycle for revaluation — making the next one in 2023. After that, the plan is to ultimately go to two-year cycles.

Will my taxes go up?

Not necessarily.

Mecklenburg County will have the option of lowering its tax rate to compensate for the higher values and keep the same amount of money flowing in.

This feels unlikely. The county is weighing a substantial investment in universal pre-K, among many other priorities. My guess is that effectively, taxes will rise even through the nominal rate will fall.

But either way, from a tax perspective, you want your assessed value to be as low as possible. You get charged on a rate per $100 of value. The current county rate is just under 82 cents (add another 42 cents if you’re in the city of Charlotte).

If you’re super into this, you can apply to be on the county’s Citizens Revaluation Advisory Committee. Applications are due Nov. 10.

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Andrew Dunn
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