Reassessments set to speed up

The legislature today may require timelier revaluations when property values change

Homeowners in big counties such as Wake, Durham and Johnston could see tax departments setting new values for their property more frequently.

The General Assembly is expected today to give final approval to bills requiring some counties to speed up scheduled reassessments when property values dramatically dip or rise. The goal is to keep tax values close to market values.

Counties must reassess properties for tax purposes at least once every eight years, according to current state law. The legislature wants to require counties with 75,000 people or more to plan reassessments when median market values differ more than 15 percent from tax values.

In fast-growing counties such as Wake, homeowners are surprised when they see how much their home values jump in eight years. And thousands of people who buy houses in neighborhoods right before they get hot get a break on their taxes because of the lag between assessments.

Reassessments after big price swings put tax values back in line with market values, said Sen. Richard Stevens, a Cary Republican. "You want to make sure properties are taxed on a fair or consistent basis," said Stevens, a former Wake County manager.

Wake reassesses property every eight years, but commissioners have been thinking about speeding up the cycle. Now they may have to.

"We've had lots of discussions this year about doing it more frequently," said Joe Durham, Wake's deputy county manager. More frequent reassessments are fairer and reduce "sticker shock" -- the surprise homeowners get when they see how their property values have gone up in eight years.

Wake's property values increased an average of 43 percent in this year's revaluation, prompting widespread protests and appeals.

Under the proposed legislation, if market values in a county fall significantly below or climb significantly higher than tax values, counties would have, at most, three years to reassess.

Durham's 4-year cycle

Ellen Reckhow, chairwoman of Durham County's Board of Commissioners, said the county aims for a four-year cycle but delayed it a few years ago because of a drop in nonresidential property values. The county did a reassessment this year.

If the county had done its assessment as originally planned, homeowners would have had to take on a greater share of the tax burden.

Assessing property every four years is better than eight-year cycles, Reckhow said, "but it would be nice to have a little flexibility to look at the economic conditions to see if it makes sense."

Big jump

Residents of Raleigh's inside-the-beltline neighborhoods got a jolt when they saw their property assessments rise an average of 73 percent.

Disbelieving residents flooded the tax department with questions. Many were especially shocked at a steep rise in land values, partly a consequence of the tear-down phenomenon -- people buying older homes in traditional neighborhoods and demolishing them to make way for bigger houses.

Periodic revaluations aim to ensure that homeowners pay their fair share for city and county services based on the worth of their homes. For homeowners, a higher value assigned to their property can mean a sudden increase in their tax bill, though municipalities typically adjust the tax rate down to partially compensate.

More-frequent assessments in a volatile housing market could be good for homeowners, state lawmakers say.

Some residents are skeptical. Lee Folger, who lives near Cameron Park, said timing was not the problem. He maintains the county goes about assessing property the wrong way. It would be better to consider long-term housing price trends rather than recent sales when determining value, he said.

"They have a flawed system," he said. "There's nothing the legislature can do to help."