- New Hanover evaluates the value of all properties every four years
- The sale of similar properties, the condition of the property, the quality of the construction and the specifics are taken into account
- Fluctuations in the district’s overall rating are not uncommon
- Those who disagree with their home valuation can appeal
The appraised value of all New Hanover County’s real estate has increased 30% since the county was last valued in 2017.
The county’s new pre-appeal tax base is $ 43.3 billion, compared to $ 30.5 billion in January 2017. That jump doesn’t mean the estimated value of every property has changed at the same rate.
An increase in the estimated value does not necessarily lead to higher property taxes. The final tax rate will be approved by the New Hanover County Board of Commissioners in June.
Why does New Hanover County conduct property valuations?
According to Adam Jones, chairman of the Department of Economics and Finance at UNC Wilmington, local governments traditionally finance their businesses from two main sources: property tax and sales tax.
Collecting sales tax is pretty straightforward as local governments simply apply the tax rate to the value of an item purchased, Jones said. However, for property taxes, a local government needs an accurate valuation of each property to determine the amount of property tax it should collect from each property owner.
New Hanover County evaluates the value of all real estate – including residential and commercial property – every four years to get an updated and accurate picture of the county’s tax base, said Allison Snell, New Hanover County’s Tax Administrator. North Carolina law requires counties to re-evaluate at least every eight years.
The new property valuations should reflect the market value of a property as of January 1, 2021. Notices of property reviews were sent to owners in February and reviews can also be viewed online.
What is the evaluation process like?
Valuation of the 110,000 properties in New Hanover County takes time. According to Snell, the county’s employees started working on the new assessment back in 2018.
When assessing the value of a property, employees consider a range of data, including sales of similar properties in the neighborhood, the condition of the property, the quality of construction and unique features.
Each county uses a value map to guide its evaluations. The schedule assigns a value to certain features and constructions, said Cal Morgan, a commercial real estate appraiser and owner of JC Morgan, a Wilmington appraisal firm.
Morgan was also previously a member of the North Carolina Property Tax Commission and is currently a member of the Wilmington City Zoning Board of Adjustment.
Employees do not consider past assessments of a property when assessing current value, Snell said.
“Everything is a fresh start,” she said. “Previous reviews have no weight when we re-evaluate them.”
Employees want to determine the market value of a property – the price it would be sold at under current market conditions. Since this evaluation process is carried out over several years, more weight is given to the market conditions in the past year. In that assessment, it’s 2020, but conditions in 2018 and 2019 were still factored in, Snell said.
County employees rate properties using a mix of site visits and “desktop reviews,” where employees look at property data online to make their valuation.
This is the first year since 1999 that the county staff completed the assessment without entering into a contract with a third party. In the past, various combinations of county and third party employees have completed the assessments, Snell said.
Is a 30% increase unusual?
Fluctuations in the overall valuation of the county’s property are not uncommon.
From 1999 to 2007, New Hanover County’s properties experienced a 56% increase in appraisal value. The values decreased by 17% from 2007 to 2012, but then increased by 14% between 2012 and 2017. Before 2007, the district assessed its property values every eight years.
However, looking at the increase in overall valuation doesn’t give a clear picture of what types of properties have increased or decreased in value over time, according to Morgan. Dividing the data into types of properties can help make trends more apparent.
The county’s residential real estate saw a 26% increase in value, while commercial real estate – which includes apartment buildings, retail, and industrial properties – saw a 42% valuation, according to Snell.
More affordable homes – valued at less than $ 499,999 – had the largest increases in appraisal value compared to other residential properties. In the case of apartments and other multi-family houses, the estimated value increased the most on the commercial side.
Increasing valuations can be due to improvements that have added value to a property or increases in value due to increased demand or other factors, Jones said.
The Property Shop owner and broker Tom Harrington said New Hanover County saw a booming real estate market last year caused by high demand for homes, low inventory levels and low interest rates.
These market conditions may have boosted valuation values, Jones said. However, since every property is valued under the same market conditions, the valuation values should be comparable.
What if I disagree with my property valuation?
If owners believe the county’s assessment does not match the market value of their property, they can appeal.
Residents can file their first appeals until May 11th. After this filing, a county employee will review the rating and send a notice to the owners of their decision. If the owner still does not agree with the review, they can contact the New Hanover County Board of Equalization and Review.
Additional appeals are available to the North Carolina Property Tax Commission at Raleigh and the North Carolina Court System.
Reporter Emma Dill can be reached at 910-343-2096 or [email protected].