Real Estate Assessments
Reassessment Value Change Due to Home Mortgage Crisis
County Offices of the Commissioner of the Revenue and County Assessor have
received many calls lately from homeowners asking for their property value to
be lowered because of the current market slump. We understand that concern, but thought we might save you some
time and money by providing the answer to your question via our website.
County is required by state law to conduct a reassessment at least every sixth year
or sooner. They are normally done every
four years, the last becoming effective on January 1, 2006. The state requires that reassessments, at
the time they are completed, be based
as close as possible to 100% of fair market value. The values adopted at that time were based
on arms-length sales of properties similar in type (residential, commercial,
etc.), location and construction that took place during the previous four year
period. Many of these sales took place
in 2004 and 2005.
As you well
know, these years were “hot market” years that began to cool just as the
reassessment became effective. Some of
you may remember a similar situation that occurred after the reassessment that
became effective in 1990, based on sales from the prior four years.
by state law, is not permitted to reap a financial windfall from a higher
reassessment. If it appears that a
windfall should occur as a result of the existing real estate tax rate, the
rate must be lowered to one that permits no more than a one percent increase in
the total real estate levy.
The resulting levies on individual properties may be slightly higher or
slightly lower. You may recall that in
2006 the tax rate was lowered from $0.81 per hundred dollars of assessed value
to $0.42 cents. This lower rate became
the new base real estate rate. As in
any other year, if more money is needed for county budget necessities, a public
hearing must be held before final judgment is made. A hearing was held and a rate of $0.45 was adopted. It has been changed in 2007 and 2008, always
with a hearing. The current (2008) tax
rate is $0.50 per one hundred dollars of assessed value.
reassessments. Bids to perform
reassessments are made by experienced appraisal firms, then interviewed and
selected by the County. They are then
appointed by the Commonwealth of Virginia as the reassessment authority. When the reassessment is completed, public
hearings are held by the appointed firm, which can make changes to their valuations. Further
hearings are conducted by a Circuit Court appointed Board of Equalization. This Board is composed of real property
owners from Clarke County. Assessments
may be adjusted, or equalized, by this Board.
A final appeal may be made to the Circuit Court but very few are made.
reassessment values remain in place for the four-year period. New construction or land splits occurring
during the period must be assessed by the Clarke County Assessor using value
indicators that were developed for the current reassessment period. This insures that all property is assessed
equitably during the effective period. Lowering individual property values would upset the equity
of the system.
Could reassessments be done more
often? Yes, but there are many things to
consider, not the least of which is cost.
The purchase cost of the most recent reassessment contract (by itself)
was nearly $110,000. Consider what has
happened to the cost of gasoline since 2005.
To have two assessors drive all over the County, down farm roads and
lanes…you can imagine what the next one will cost. Then add the cost of services (manpower and equipment) for the
sets of hearings, travel by the Equalization Board, etc.
note: when values rose so high and so
fast during the 2002 to 2006 period, the county was unable to change the
assessments, but instead had to abide by values established in the period 1998
to 2001. Those values were lower and
had to be carried into the 2002 to 2006 period. During that period, people were buying homes for $500,000 and
paying taxes on value assessments in the high 200’s or low 300’s. The tax rates
were much higher then (three years at $0.74 for three years and $0.81 for one
year) to accommodate needs. If the
values come down, as they might for the next reassessment period, you can
almost count on the tax rate going up again.
There are more people here now creating a demand for more services and
placing an increased burden on all county government systems.
is intended to show the reasons behind the inability to lower values, even
though the market has changed. We
couldn’t do it when the market rose several years ago, nor can we when the
market is slumping. Current sales (the
good ones, done at arm’s length) will be considered when the next reassessment
is conducted during 2009, to be effective in 2010. We hope this has helped your understanding of this issue. By the way, if you wish to review the
information we have on your property, you are welcome to contact the Office of
the County Assessor, Donna Peake, at 955-5110.