Homeowners need to brace for new property tax values
In a little over a month, Mecklenburg County property owners will start getting their new tax values in the mail for the first time in eight years, and they could be in for some sticker shock.
County officials say the value of both residential and commercial property has risen sharply since 2011, propelled by a booming local economy and hot real estate market. The new values will reflect that, and will potentially shift how Mecklenburg, Charlotte and the other local municipalities distribute their property tax burden in the coming years.
“Everything’s moving right along,” said Ken Joyner, Mecklenburg’s tax assessor. The county has assessed more than 320,000 parcels so far, out of about 365,000 in the county. “We’re still working on a lot of condos at this point.”
The preliminary numbers are eye-popping. Overall, property values countywide are up 53 percent. The average home value is up 40 percent, while commercial property, which includes apartments, has risen 77 percent on average.
This is the first revaluation since 2011. Eight years ago, the prior revaluation turned into a debacle for the county, as a botched effort led to thousands of appeals from property owners over inconsistent valuations. It took years to untangle and revise property valuations, and Mecklenburg ended up refunding property owners about $100 million.
Joyner, who became tax assessor in 2013, said the county has since created a dedicated revaluation division and added 46 employees to avoid the problems that plagued 2011, including a quality control position. They’ve also taken steps to simplify the appeals process and put more information online to make it easier for property owners to understand and appeal their valuation.
Here are the answers to some key questions about the 2019 revaluation:
Q: When will I get my new tax value and my property tax bill?
A: The county will mail out new property tax values in mid-
January. But that won’t tell you how much your property taxes will be next year, because tax bills won’t be sent until after local governments set their budgets and tax rates in the spring and summer. Those bills will go out in July.
Q: How much is my home’s value going up?
A: Short answer: Probably a lot. Long answer: It all depends. The Observer examined a sample of 100 homes sold this year, clustered in 10 neighborhoods throughout the county, from Ballantyne to Cornelius to Druid Hills, and compared the sale price to the county’s assessed value. Every one of them had sharp jumps in the median value, ranging from increases of 36 to 133 percent.
But the biggest percentage increases weren’t in wealthier enclaves such as Eastover or Ballantyne. Values rose in those areas, but generally in the 40 to 50 percent range. Instead, the biggest percentage increases were in neighborhoods just west, north and east of uptown Charlotte, fast-changing areas that have been popular with investors and new homebuyers in recent years.
In the 28208, 28205 and 28206 neighborhoods, for example, a sample of properties that sold this year all showed median increases of more than 100 percent over their assessed values.
Granted, this is a small sample size, and the price a property fetches on the market doesn’t always correspond to its tax value. But it suggests close-in neighborhoods ringing uptown could see some of the most dramatic spikes next year.
Q: So my tax bill is going way up, right?
A: Not necessarily. Tax values are different from tax bills. Here’s how it works. The county’s tax rate this year is 0.8232 for each $100 of assessed value. So a $200,000 house would have a property tax bill of $1,646 from Mecklenburg County ( plus more from the city of Charlotte or whichever municipality it’s in).
If that house doubled in value, to $400,000, and the tax rate stayed the same, the property tax bill from the county would double as well, to $3,292.
But the property tax rate won’t stay the same – each local government board, such as the Mecklenburg County Board of Commissioners and the Charlotte City Council, will set its own property tax rate next year. Each could set a rate that captures more taxes, lower the amount of taxes collected or keep it flat, at the “revenue-neutral” rate.
For example, in the hypothetical above, the county could slash the property tax rate in half and still collect $1,646 worth in taxes from the $400,000 house. That would be the revenueneutral rate. Local governments are required to publish the revenue-neutral rate, but they’re not required to follow it when they set their budgets.
Even with a revenueneutral rate countywide, the taxes on an individual property could still go up if that property’s value increases more than the median amount.
And there’s another wrinkle: With commercial property values going up much faster than residential values, commercial properties will make up a bigger piece of the county’s total tax base next year (right now it’s about about 35 percent commercial and 65 percent residential real estate).
That means commercial properties will bear a bigger piece of the tax burden next year, potentially sparing homeowners more of an increase.
Q: What if I think my new value is wrong?
A: When homeowners get the notices in midJanuary, Joyner said detailed information will be included about how to appeal. Homeowners can start an immediate, informal appeal via telephone, in person or online at www.meckreval.com.
“If you could, respond to us as quick as possible,” said Joyner. “We’ll accept appeals in any form.”
While the county is asking people to contact the Assessor’s Office within 30 days if they think there is a problem with their new property value, Joyner said the Board of Equalization and Review will accept appeals through May 20.
Q: So this is it until 2027, right?
A: North Carolina law requires counties to revalue all properties at least every eight years. Mecklenburg has stuck with that minimum, which would put the next revaluation eight years from now.
But Joyner said he’s pushing for the county to move to a four-year cycle. That would place the next revaluation in 2023. Given the real estate cycle, Joyner said that would be more fair to owners and lower the likelihood of evaluating properties in extreme boom or bust times.
“The whole purpose of the revaluation is to take new market data to distribute all of those taxes,” he said. “Different markets and different industries will appreciate and depreciate at a different rate.”