North Carolina counties are required to perform a revaluation on property every four years to establish market values. It’s a tedious process that requires many steps and takes many factors into consideration, as Macon County Tax Administrator Richard Lightner recently explained to commissioners.
The appraisal process includes collecting property sales data and reviewing the number of sales, analyzing construction costs, visiting properties, developing a schedule of values to use across the board and finally sending out notices to property owners letting them know the updated value of their property and how much in taxes they’ll pay in 2019.
“We look at all the maps and look and analyze sales from 2017 and 2018 to see what the market is doing now,” Lightner said.
The bottomline, he said, is that while there has been a small overall growth in property values in Macon County in the last four years, the market is fairly stagnant compared to what it used to be in the 1980s and ‘90s. Back in those days, Macon County’s population hovered in the 20,000-range and was growing rapidly and the market reflected that. Subdivisions and golf course clubs were being built all over the county, especially in the Highlands area. Lightner said there were about 4,000 home sales a year and 1,500 new building permits being issued a year. Now only about 70 new homes being built a year.
“It’s a totally different market now — sales have flat lined after coming up some in 2015,” he said.
The total tax value in 2015 was just over $8 billion and 2019 numbers have bumped it up to over $8.1 billion. However, considering how much value the county lost during the last couple of reassessments, Lightner said the 0.003 percent growth is good news. During the 2014 revaluation process, Macon County saw property values drop an average of 25 percent over eight years, which dropped the county’s tax base from $9 billion to $7 billion and raised the tax rate from 28 cents to 34 cents per $100 of assessed value.
“Basically you’re breaking even now. All this tells you is the market hasn’t grown — it’s stabilized the last four years,” he said to commissioners after reviewing all the numbers.
Based on the total valuation, Lightner said the county could expect to collect about $29.3 million in property taxes during the 2019-20 budget cycle. Barring any major budget cuts or additions, he said the county is looking at having to increase its property tax rate from 34 cents per $100 of assessed value to 37 cents to reach a revenue neutral tax rate.
“That’s your starting point — where you end up is the process your board is responsible for (during the budget process),” Lightner said.
Lightner showed commissioners a few examples of value changes to different homes throughout the county and the results are all over the board. An average home valued at $260,500 in 2015 now will have a value of $215,820 in 2019 and the owner’s taxes will decrease about 12 percent for a savings of $111 a year. A parcel with a doublewide trailer valued at $93,600 in 2015 increased in value to $100,910 for 2019, increasing the property taxes 14 percent. On the other end of the spectrum a large custom home valued at $10.1 million in 2015 will now be valued at $13.2 million, increasing the taxes 38 percent.
“The market for each house is different depending on the location in the county, the neighborhood, etc.,” Lightner said. “Properties will not increase at the same percentage countywide — location is still a big factor.”
Looking at other trends, Lightner said the valuation process has shown that people are gravitating more toward town instead of being out in more rural locations in the county. In Highlands, people are building more expensive homes close to downtown instead of in the golf clubs.
“People don’t want to be way out at the end of Cowee or Burningtown — there’s still a market for those areas but the market is smaller and smaller — people want to be in town,” he said.
When just looking at property tax, Lightner said the township of Highlands makes up 46 percent of the tax base — add in Scaly Mountain area and the total increases to 54 percent of the tax base. The next largest tax base comes from the town of Franklin, though Lightner said growth in the town could be more if there weren’t so many vacant spaces within commercial shopping centers.
For many new property owners moving to Macon County from other states where the assessment process may be different, Lightner said it’s mostly just about educating them so they understand the many factors at play and also explaining the appeal process if they choose to dispute their new valuation.
He pointed out that the percentage of increase or decrease in value is not a valid reason for appeal according to state law and the burden of proof in an appeal does rest with the taxpayer to show the property has been “excessively overvalued.”
New property values will be finalized this month and notices to owners will be sent out beginning in January. Information regarding the appeals process will accompany those letters and the Macon County Board of Equalization will begin hearing any appeals in April. During the 2007 revaluation process, more than 4,000 appeals were filed when property values went through the roof, but the appeal numbers were around 400 during the 2015 process.
Lightner also pointed out how much money the county has saved in recent years by performing the revaluation process in house instead of contracting out the service to a third party.
“We’ve saved the county $5.2 million over the years since 1999,” he said. “We’ve saved $956,000 this time around.”
For more information about the revaluation process in Macon County, including a PowerPoint presentation, visit www.maconnctax.com/#/revaluation.