I got my property tax bill from the good people at the Iredell County Tax Collector’s office the other day. Residents throughout the county and elsewhere are getting similar bills and thinking about how they’re going to pay them and if we really ought to have to pay that much for what we get. Sure, I think of those things, but being in real estate, it also always sets off a thought process about the accuracy of tax valuation and how home owners and buyers view that.
Within the last year while working with clients, I found one property where the tax folks had overstated the size of the house by over 400 square feet. In another case, the same tax folks understated the size of the property by over 400 square feet. These goofs were likely made when the houses were first listed after being built. Now, you’ve got to realize that when the tax people are doing a revaluation, they have to do this for all properties in the county in a relatively short time. They don’t and can’t go into the detail that a REALTOR or appraiser goes into to set the value of a property. Mistakes will be made. So, it is up to the property owners to question the accuracy of any part of the revaluation process. The size of the property is only one factor, but clearly, that’s a big one. If you find that the tax folks overstated the size of your home, you can go to them and get that changed, although I doubt they’ll pay you back for previous year’s over charge. If they’ve understated the size of your home, it’s also up the homeowner to fix that. Don’t want to do it? Just remember that if you sell your house in the future, the listing agent and the buyer’s agent will be looking at that square footage figure and the property value. See the Iredell County Tax Collector web site HERE for more info on making adjustments.
That brings up another observation. Property valuations are a rough snapshot of that valuation taken at the time of the valuation. As time goes on, markets change but the tax valuation stays the same until the next revaluation. When I first got into real estate and general property values were rising steadily, REALTORS normally didn’t pay much attention to tax values unless they supported the seller’s or buyer’s position, and usually, the tax value was low compared to then-current market value. In the last year, I’ve noticed more and more properties selling for at or even below the tax value because the actual market value (price) has dropped over that time. We never thought we’d see that here in Piedmont NC, but here it is. See a recent Charlotte Observer article HERE for more about house prices. Yes, sales are going up, but one of the reasons is the decline in prices. We’ve seen some evidence that we may be bumping along on the bottom of the price drop, but it will likely take a while before we see any substantial increases in prices over the full range of houses in our market.
So, your property tax bill has more to do with what you’ll pay the local tax collectors than it has to do with what you might be paid for it in the current market.