HOME VALUES RISE
New property assessments could bring higher tax bills for some area residents
For the first time in eight years, most Hamilton County, Tenn., property owners are getting higher assessments for the property taxes they pay on their homes and commercial properties.
But while most properties show gains since the last countywide reassessment in 2013, those increases won’t necessarily mean higher property taxes next year. In fact, those whose property values rise less than the county average may get a tax cut next year. But those in hot areas of the county like North Chattanooga and parts of Ooltewah and East Brainerd are likely to see higher bills based upon greater appreciation in their properties over the past four years.
Under Tennessee law, local governments must adjust their property tax rates, or millage, to offset any increase in the overall value of existing property. The reappraisals every four years are designed to equalize tax assessments with the real, changing value of property, but cities and counties must roll back their rates to keep the reappraisals revenue neutral.
Hamilton County Assessor Marty Haynes said his office has mailed out nearly half of the property reappraisals to the 146,000 homeowners in Hamilton County, and other property owners should get their new assessments within the next three weeks.
Unlike the last reappraisal four years ago, Haynes said, most properties have increased in value since 2013 and are being appraised at higher values for the property taxes that will be due early next year.
“The last reappraisal in 2013 was really unprecedented because we didn’t see an increase in average property values in the previous four years coming out of the 2009-2010 recession,” he said. “The market has improved in recent years and we’re seeing gains more typical of the increases we saw in previous reappraisals. The public sets the market based upon what they are willing to pay, and we just try to accurately reflect those values in our assessments.”
Henry Glascock, a local appraiser and president of Henry B. Glascock Commercial Real Estate Co., said property values in Riverview and North Chattanooga neighborhoods have risen 30-40 percent in the past four years.
“Those are the areas that are seeing the biggest increases, but overall it’s a much better economy, sales prices are going up and that’s reflected in the tax assessments going out all over the county,” he said. “It’s hard to argue with the facts.”
Last year, the median price of homes sold through the Greater Chattanooga Association of Realtors rose to $160,400, up 22 percent from the median price of $131,500 four years earlier at the time of the last reappraisal.
“Demand for housing has outstripped the growth in inventory on the market, so we’ve seen a definite increase in prices in many neighborhoods,” said Mark Hite, a Keller Williams Realtor and president of the Greater Chattanooga Association of Realtors.
Glascock said many commercial and industrial properties didn’t increase in value by that amount, but some commercial properties in redeveloping areas of the Southside or hot parts of Collegedale or Hixson likely had bigger gains in property values. Appraisers like Glascock are getting lots of calls from property owners inquiring about whether they should challenge their assessments.
“Our local appraisers in Hamilton County are probably as competent as in any county I have worked in, but they are not perfect and there are some times that the assessments can be challenged,” Glascock said.
Haynes said his office is getting calls and questions from fewer than 5 percent of those who have received their property assessments. Those who want to challenge their appraisals should call 423-209-7990, Haynes said.
If property owners are still dissatisfied with their assessments after the staff review, they may appeal to a county board of equalization for a hearing by May 20. The county appeals board will meet in June.
“We do a field review of every property and in this reappraisal cycle we have incorporated GIS satellite images to help us review every property,” Haynes said. “We look at prices for comparable properties in an area, the square footage and age of a structure and the quality of its construction and other amenities. The purpose of a reappraisal is not to increase revenue for Hamilton County and the municipalities located therein, but to update and equalize the value of all properties located in the county.”
Hamilton County and its 10 municipalities will readjust property tax rates this summer to roll back the rates enough to keep the same amount of money coming into local governments as part of the revenue-neutral requirements of reappraisals in Tennessee.
The current county property rate was set in 2009, when the previous $3.15 per assessed $100 of property value was rolled back to its current rate of $2.76 per $100 of assessed property. From 2005 to 2009, the average property in Hamilton County increased 12.4 percent in value in the years leading up to the Great Recession, which hit in the 2009-2010 period and cut the values of many properties in subsequent years.
From 2001 to 2005, property values in Hamilton County rose an average 7.5 percent, which rolled back the property tax rate in 2005 from $3.06 per $100 assessed value to $2.89 per $100 of assessed property.