2016 Reappraisal ("Revaluation")

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Our Promise to You

Reappraisal is always a challenge, because the goal is to appraise tens of thousands of properties all at one time, and in a way that is fair and equitable to all property owners. We strive to follow established industry standards for mass appraisal; however, we recognize that there will be situations where the mass appraisal approach may produce an estimate of value that seems somewhat high or low for an individual property.  We are committed to working with all property owners to ensure that every property is appraised at a reasonable estimate of its January 1, 2016 market value.

 

General Information:

About the 2016 Reappraisal

Why we do it

How Reappraisal works

How your tax value is determined

What “Market Value” means

What Market Value is not

Is Market Value the same as sale price?

When you will be notified

Will your tax bill change?

How to appeal your 2016 appraisal

Frequently Asked Questions (FAQs) about Reappraisal

Important Dates for the 2016 Tax Year:

Reappraisal Notices mailed

Dec. 8, 2015

Effective date of Reappraisal

Jan. 1, 2016

Deadline to request face-to-face meeting

Jan. 8, 2016

Board of Equalization and Review hearings

Hearings begin after initial meeting on April 4, 2016

Deadline for 2016 real property appeals

5 p.m. on May 2, 2016

First tax bills impacted by Reappraisal

Summer 2016

 

About the 2016 Reappraisal

Reappraisal is the process of taking a market value “snapshot” of all real property in the county, as of January 1 of the reappraisal year.  Real property includes all vacant and improved land, whether residential, commercial, agricultural, or industrial.  

For each property, that market value becomes the tax value for every year until the next reappraisal occurs, with a few important exceptions (such as new construction or a change in zoning).   When one of the exceptions occurs to an individual property, its market value will be adjusted using the rates developed for the most recent reappraisal.  For example, if a house is built in 2018 on a lot that was vacant in 2016, the new house and lot will be appraised using 2016 market values.

Introduction to the 2016 Reappraisal - Kimberly Simpson, Tax Administrator 

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Why we do it

North Carolina law requires all counties to reappraise real property every eight years.  Durham County’s last reappraisal took effect on January 1, 2008, so our next reappraisal will become effective January 1, 2016.

Over time, property values in the county change at different rates.  For example, there might be a lot of growth in one area of the county that causes market values to increase faster there than in other parts of the county.  Since property taxes are based on property values, unequal changes in values means some property owners pay more than their share, while others pay less.  The purpose of the reappraisal is to reset all property values back to market value, so that the property tax burden is spread fairly across all taxpayers.

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How Reappraisal works

To prepare for the reappraisal, we examine every recorded sale of property in the county, in addition to reviewing building cost data and income/expense information from income-producing properties. These approaches help us to develop estimates of market value, using uniform standards, for over 110,000 individual properties, even though they may be of different types and locations.  These are known as “mass appraisal” methods and processes.  They are similar to the techniques used by single-property appraisers, but they follow a different set of appraisal industry standards, since they are designed to predict market values for thousands of properties, rather than one property.  All Durham County appraisal staff have been certified by the North Carolina Department of Revenue to perform property tax appraisals, through a series of educational coursework, comprehensive examination, and continuing education requirements.

In preparation for the 2016 general reappraisal, every improved property in Durham County has been reviewed, through a combination of computer-based reviews and field reviews, to ensure that the characteristics of that property are reflected accurately in the county tax records.  As a part of this review, all residential and commercial properties have been digitally photographed in high resolution to ensure that all improvements can be compared consistently and uniformly, as well as to validate property addresses and locations to assist emergency responders.

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How your tax value is determined

Market value is not determined by the tax office; rather, it is determined by the actual activity in the local market.  The tax office simply examines and analyzes market activity to develop formulas for predicting the values of individual properties.  For example, even though not all properties will sell, or rent, or be built at the same time, information from those that have sold can be used to establish typical market rates for each of these market activities.  Those rates can then be applied to all properties to ensure that reasonable values can be developed in a uniform way.

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What “Market Value” means

In North Carolina, market value for tax appraisal purposes is defined by law. General Statute 105-283 states that market value is “the price estimated in terms of money at which the property would change hands between a willing and financially able buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of all the uses to which the property is adapted and for which it is capable of being used.”  This definition is similar to the concept of market value used in other types of appraisals.  Another way to say it is that market transactions are those that happen at “arm’s length,” or situations where buyers and sellers are reasonably informed, acting in their own best interests, and under no pressure to buy or sell.

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What Market Value is not

There are many types of transactions that do not generally meet the market value standard.  Sales that occur as the result of a foreclosure or pre-foreclosure process, auction sales, estate sales, sales between related parties, and sales involving non-profit institutions are all examples of transactions that must be carefully analyzed to determine whether they can be considered market transactions.  Similarly, there are other meanings of the term “value” that are usually not the same as market value—for example, insured value, salvage value, present use value, book value, or actual construction cost.  Again, other meanings of value must be compared to the market value definition to determine whether they are useful indications of market value.

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Is Market Value the same as sale price?

Individual transactions, even if they are “arm’s length,” do not necessarily occur exactly at the expected market rate.  Since every combination of buyer, seller, and property is unique, there will normally be factors that cause the price for a particular transaction to be higher or lower that the market would predict.  Put another way, some deals are better or worse than others, but we can only decide that by examining the market as a whole, and comparing the individual transaction to other, similar transactions.  Regardless of the terms of a single sale or lease or building cost, every property must be evaluated in terms of what is reasonable and typical in the market for the property type and location.

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When you will be notified

Written notice of the 2016 assessed value will be mailed to all property owners in early December of 2015.  The tax office will issue a press release and will also post a notice on the county website, dconc.gov, when the specific mailing date is determined.

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Will your tax bill change?

Not necessarily.  The annual tax bill for each property is calculated by multiplying the tax value by the tax rate, which is determined each year by each taxing jurisdiction—the county commissioners, city council, fire districts, etc.  Some tax bills will go up, some will go down, and some will stay about the same.

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How to appeal your 2016 appraisal

If you believe that the 2016 appraised value of your property is not a reasonable estimate of what it could have sold for on January 1, 2016, you have the right to appeal the value.

There are often issues other than tax value that concern property owners, such as:

·     The amount of change from the last reappraisal

·     Affordability of the expected taxes

·     Level of services provided

While these are all understandable concerns, the only issue the tax office can address is the appraised value.

Remember that the big question here is, “What is the market value of your property on January 1, 2016?” 

Visit www.dconc.gov/taxhelp to begin the review and appeal process.

 

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