Shorter cycle could cut sticker shock
There could be a way to reduce the sticker shock some property taxpayers experienced in 2012.
Tax Director Ben Chavis suggested a five-year revaluation cycle this week that could counter volatility in the real estate markets. Because Guilford uses an eight-year cycle, taxpayers paid bills through 2012 based on 2004 values, which could have been much higher that actual later market values seen in the housing recession.
Late last year, average tax values statewide were 104 percent of market value, according to a N.C. Department of Revenue report. Guilford County was 99.56 percent, but Alamance, Davidson, Forsyth, Randolph and Rockingham counties all top 100 percent. Randolph and Forsyth counties will revalue properties this year. “When you see tax values over 100 percent, property taxpayers get antsy,” Chavis said. “I think we will see a movement for a shorter cycle. I favor a five-year-cycle.”
Chavis said he expected action in the General Assembly this year to set a shorter mandatory cycle. Forsyth County officials revalue properties every four years.
“I have supported a shorter cycle for years,” said Board Chairwoman Linda Shaw. “But we have not acted on it.”
From 2004 to 2007, the local real estate market grew at a steady rate with annual increases in the selling prices of homes. During the last three years, however, foreclosures and short sales have been responsible for a 20 percent decline in the average selling price of existing homes.
“We went though two cycles in eight years,” Chavis told county commissioners during a retreat.
Despite the recession, the total real estate base grew to $37.4 billion, up 18 percent from the $31.8 billion 2004 value, mostly from new construction. There were few cases of extreme sticker shock in 2012, Chavis said, as the county saw no general shift in values up or down.
Nevertheless, there were 7,500 informal assessment appeals in 2012 representing 3.6 percent of property owners. An appeal rate below 10 percent is considered good, Chavis said.
Cycle: State law requires counties to perform a property tax revaluation at least every eight years. Approximately half the counties in the state have adopted a more frequent schedule. As many as 25 counties, including several coastal communities, delayed revaluations to avoid revenue shortfalls.
Calculation: Guilford County property taxes for 2013 were calculated by multiplying assessed value in 2012 by the current tax rate per $1,000 value.