This year is a property tax revaluation year for Forsyth County. What that means is that the value of all real property within Forsyth County borders will be reassessed by the county’s tax office. Forsyth County revalues real property every four years, and in 2017 average property values increased by about 6% from the previous revaluation.
Paying attention to revaluation years is critical, since assessment reductions achieved through a successful property tax appeal are not retroactive. So, your opportunity to maximize potential savings from a property tax appeal is dependent upon filing that appeal during a revaluation year.
Several counties surrounding Forsyth — including Davidson, Davie, Stokes and Surry —are also revaluing property this year. Each county in North Carolina is required to revalue for property tax purposes all real property within its borders at least once every eight years, although some do it more frequently, generally on a four-year cycle. North Carolina has 100 counties, and their revaluations are staggered so that only some counties are performing a revaluation in any given year.
Understanding How Property Tax is Assessed:
Listing, Appraisals and Valuation
To understand the property tax system, it’s helpful to grasp the concepts of “listing” and “appraisal.”
- Listing refers to the requirement that property owners file a report showing the property owned by them as of the listing date of January 1. The type of information required and the listing itself varies between real property and personal property. For real property, counties maintain a permanent listing system, which only requires owners to file a listing if they’ve modified their real property within the last year.
- Appraisal: Based on the listing, the property is then “appraised” or valued for property tax purposes. The standard for valuing property for tax purposes in North Carolina is “fair market value.” In other words, the value of property for property tax purposes is supposed to be equivalent to the price at which the property would change hands between a willing buyer and a willing seller.
Once all property has been listed and appraised, the county or city governing body sets a tax rate and bills are sent out to the property owners, generally in late summer. While some may be tempted to wait until the property tax rate is set to determine how much their taxes would increase, it’s too late at that point to file an appeal — the deadline would have already passed — for the year. Property tax is legally due on September 1 of each year; however, property owners can pay the property tax without penalty as late as January 6 of the following year.
What if You Disagree with the New Property Value?
If your company receives a property tax value that you think is too high, you have the right to file an appeal. Since this is a revaluation year in Forsyth County, revaluation notices will be sent to each property owner advising them of the new assessed value for their property as of January 1, 2021. Revaluation notices have already been sent for residential properties. Commercial revaluation notices should come out by the end of the first quarter.
The appeals process begins once the taxpayer receives the notice of the assessed value of the property. Once that occurs, the company has a period of time (as stated on the notice) to appeal informally to the tax assessor’s office. The taxpayer can provide information to a representative of the tax assessor’s office that he or she believes offers evidence of a lower value.
Property Tax Appeals: Beyond the Informal Review
Board of Equalization and Review
If the informal appeal is unsuccessful, the taxpayer can appeal the proposed valuation to the Forsyth County Board of Equalization and Review. This is a local board of citizens chosen by the County Commissioners to hear property tax appeals. A hearing before the local Board is usually informal. The taxpayer and county are both given a chance to present their evidence as to value, and the Board then may ask questions. The Board typically renders a decision at the conclusion of the hearing and then a written notice will be issued later.
North Carolina Property Tax Commission
If the taxpayer is not satisfied with the results of his appeal to the local Board, he has 30 days from the date on the written notice of decision to file an appeal with the North Carolina Property Tax Commission. Failure to meet the 30-day deadline means the taxpayer loses the right to any further appeal of that year’s taxes.
The Commission is a five-member board that typically hears appeals in Raleigh. Members are chosen by the Governor and leaders in the State Senate and House of Representatives. The hearing before the Commission is a “de novo” hearing, where the determination of the local Board and any evidence or arguments made before it are of no consequence. The Commission bases its decision solely on the evidence presented in the hearing.
An appeal to the Commission is a formal affair, similar to a trial in State Superior Court. There are direct and cross-examinations of witnesses both for and against the taxpayer, and the introduction of documentary evidence. Such an appeal is rarely successful without an MAI appraisal, a designation conferred by the Appraisal Institute to appraisers experienced in the valuation and evaluation of commercial, industrial, residential and other types of properties.
It may take as long as a year from the filing of an appeal with the Commission before the case is heard and resolved. There is always the opportunity to settle the case after filing the appeal, if the parties can come to a compromise. Decisions by the Commission are appealable by either party to the North Carolina Court of Appeals and, in certain circumstances, to the North Carolina Supreme Court.
When Is It Time to Consult with an Attorney?
As with any legal matter, it’s important to weigh the costs (appraisal fees; attorney fees) versus the benefits (reduction in taxes) to determine whether a tax appeal makes sense. An attorney can lend their expertise and perspective on your particular case and best advise you how to proceed, as well as act as an advocate for your case throughout the appeals process.
Working with an attorney can help you to avoid common mistakes in property tax appeals, including:
- missed deadlines
- not using the proper valuation date
- not understanding the applicable burden of proof
- not knowing what evidence is relevant and what is not
If you have questions about the listing, appraisal, and assessment of your business personal property or your business real property in North Carolina, we welcome the opportunity to assist you.
About the Author:
John Cocklereece is an attorney at the law firm of Bell, Davis & Pitt with more than 40 years of legal experience. Property tax is one of his areas of practice, along with business law, tax controversy law, and estate planning. John previously served as chair of the North Carolina Property Tax Commission. He currently serves as a member of the board of trustees of the Forsyth Tech Community College and the board of the Forsyth Tech Community College Foundation.