Tax reappraisal notices will be landing in Durham County property owners’ mailboxes next month, setting into a motion a process that could result in some paying more on commercial, residential and industrial property.
Current projections, which will change as the final values are set and the county receives more information, suggest real property values countywide have increased by 14 percent since 2008, the last time a reappraisal took place. That increase is modest compared to the the 2008 reappraisal increase of about 30 percent.
The 14 percent countywide increase includes a 12 percent increase in residential property, a 27 percent increase in commercial and a 10 percent increase in industrial.
Whether an individual property goes up or down depends on nearby property sales.
As Tax Administrator Kim Simpson says, it is all about “location, location, location.”
Information on the appeals process, informational meetings, a website and other opportunities to speak with Durham County tax officials will be included in the reappraisal notices that will be mailed Dec. 8. Here is some information to familiarize yourself with the process before then.
What is a reappraisal?
Reappraisal is required by state law at least every eight years. The process updates real property tax values to current market value for the about 110,000 parcels in Durham County. State law defines market value as the estimated price at which a property would change hands between a willing and financially able buyer and willing seller.
Property tax values generally do not change between reappraisal years, unless there is new construction, zoning or other changes.
How is the value determined?
County Tax Administration officials examine physical characteristics of a property such as the age of a structure, square footage and changes that could affect the value, such as a deck addition or an enclosed garage. Officials also review real estate transactions of nearby property.
For the 2016 reappraisal, the tax office considered 9,104 sales between Jan. 1, 2014, and Nov. 15.
Will all property tax values increase?
Not necessarily. Since reassessment values are based on nearby sales, the reappraisal value will reflect the neighborhood. Renovated homes in and near downtown, where prices have spiked in recent years, will likely have higher values. Homes in northern Durham will experience a range of increases and decreases.
According to Durham County officials, 62 percent of properties will have a higher value than in 2008, and 38 percent will have a lower value. About 52 percent will change by 10 percent or less.
Can I appeal?
Yes. You should appeal if you believe your appraised property value is higher or lower than what it could reasonably sell for on Jan. 1. A notice of appeal form and related brochure will be included in the reassessment notice. Property owners have until 5 p.m. May 2 to appeal the reappraised value, but Simpson urged owners to “appeal as soon as you can.”
Property owners who contact the county before Jan. 8 will be able to work directly with tax officials, who could answer questions and possibly address their concerns before a formal appeals hearing is scheduled.
How and when will 2016 tax bills be determined?
The Durham County Board of Commissioners and the City Council set annual tax rates for the fiscal year that begins July 1 during the budget process in the spring. The first tax bills affected by this reappraisal will go out over the summer.
Property tax relief programs
North Carolina offers property tax relief programs for qualified permanent residents who are elderly, disabled and disabled veterans.
An elderly or disabled homestead exclusion is available to residents 65 or older or to home owners who or disabled with an income of $29,500 or less. The exclusion allows for an assessment reduction of $25,000 or 50 percent of the appraised value (whichever is greater).
A disabled veteran exclusion is available to a residence owned and occupied by an honorably discharged, disabled veteran or an unmarried surviving spouse. Qualified property owners can receive an assessment reduction of $45,000.
An elderly and disabled tax deferment is available to residents 65 and older and those who are disabled. Owners must have lived and owned the property for five years, and income cannot exceed $44,250.
Deferred taxes will become a lien on the property that will be due when the owner dies, transfers the property to a non-spouse or co-owner or moves.
Dec. 8: Reappraisal notices mailed
Jan. 1: Effective date of reappraisal
Jan. 8: Deadline to request a face-to-face meeting with a Tax Administration staff member
After April 4: Board of Equalization and Review hearings begin
May 2: Deadline for appeal
Summer 2016: First tax bills affected by reappraisal