Federal income taxes make April the scariest month of the year for some people, sort of the Halloween of Spring, with IRS ghouls and goblins haunting our dreams.
But the last week of April 2007 will also mark the once-every-six-year Macon County Property Tax reappraisal. However, this should not be a scary experience since it's intent is not to raise your taxes, but to simply “equalize” property values that inevitably have changed since 2001, when the last state-mandated reappraisal was conducted.
Ricky Shoulder's job, as county Assessor of Property, includes this county-wide re-appraisal process, with the new notices scheduled to go out to all property owners the last week of April or the first week of May.
“Property values increase on the order of four or five percent each year, so we can expect an average increase of ...
about 25 percent after six years,” explained Shoulders this Monday.
“But that is just an ‘average' and not necessarily what each property owner should expect to see on the appraisal notice,” continued Shoulders.
Ricky Shoulders and his staff have been working for the past several months to review and analyze local sales of property that occurred in 2006.
“There were between 700-800 sales of property in the county last year, and about half or more of those sales are used to determine actual land prices in four or five different areas of the county.”
“We don't include the sales that aren't ‘arms length' sales, that is to say, if you buy a piece of property next door to you, you're likely to pay more for it than if it was somewhere else; we exclude ‘family sales' and foreclosures, and sales to people from out of state who might pay top dollar from a Realtor without quibbling because our land prices seem so ‘cheap' compared to Florida, or California or someplace like New York.” It's a reasonably complicated process, because there are a number of categories of property. Vacant land, for instance, is grouped 1-14 acres; 15 acres and above is a “farm,” and farms are grouped 15-30 acres; 31-60 acres; and 61 acres and above.
“Property on the west side of Lafayette, along Hwy. 52 toward Westmoreland, has tended to sell higher and appreciate in value more than property on the east side of the county. So the increase in your land value is geared to the growth in sales in your area. A piece of land near Red Boiling Springs may have only appreciated 10 percent in the last six years, while the same amount of acreage may have grown in value (based on sales) by 40 percent on the west side of Lafayette. The average, county wide will end up being around 25 percent, but it can vary quite a bit depending on the area.”
The “good news” is that after the re-appraisal is done, the State Board of Equalization and the property assessor will develop a new “certified tax rate” that will keep everyones property taxes at about the same amount they paid the previous year. The Macon County current tax rate of $2.70 will be adjusted down so that it brings in the same amount per cent on the new appraisal values of property.
“It's been three years since the county commission raised property taxes, and five or six years since they've been raised significantly. That was when the county was building the new Justice Center and a new High School at about the same time,” continued Shoulders.
“New growth has kept revenues up and sufficient for the county to be in pretty good shape financially, so if they raise taxes next year, it won't be because of the re-appraisal of property-all that does is equalize the values of existing property with the value of property that has sold in recent years.”
“And we're talking land property values here. The same exact house, or its closest equivalent, is valued the same no matter what region or section of the county it's in. A $120,000 house in Webbtown and a $120,000 house in Green Grove are going to be valued, for property tax purposes, as close to the same as possible,” continued to explain the property assessor.
“The state sets the value on swimming pools, ornamental fences, specialty features that would be in a Standard Buyers Guide reference book. If we have five properties with similar swimming pools, then the value is based on an average of those five pools.”
“In the end it's a matter of ‘median' sales of property in a particular area. Some may sell for 80-90 percent of their currently appraised value, while some might sell at 120-130 percent. Some are always going to be above the average and some below.”
“But the state setting the Certified Tax rate makes sure the property or home owner isn't going to pay higher or lower taxes next year because his appraisal is above or below the county average.”
Commercial as opposed to residential growth would help the county significantly because commercial and industrial property is assessed at the higher rate of 40 percent, as opposed to 25 percent assessment of residential and farm land.
“Nestle has really helped out, with them paying between $700-$800,000 in property taxes last year. And even though the Fleetwood and American Greetings plants closed last year, it's the personal property taxes we've lost there, not the physical property, which someone is still paying taxes on.”
Surprisingly, and fortunately, new residential construction has not slowed and the county's impact fee will bring in a healthy and growing increase in revenues again in 2007. Zoning and Impact fee collections for the first three months of the year are significantly higher than the amounts collected at this time in 2006. Those fees added more than $291,000 to county coffers last year.
Anyone who disagrees with the new property appraisal notice they receive from Ricky Shoulder's office is invited to come in a talk about it with the tax assessor.
“People mostly understand this is not ‘individualized'. With more than 12,000 parcels of property in the county, we simply have to update them all to current market values for the system to remain fair,” concluded the tax assessor.
Ricky Shoulders is more than happy to answer questions anyone may have, before or after they get the new appraisal notices. You can find him in his first floor office in the County Courthouse, or call him at 666-3688.