Metro property values on the rise

The Atlanta Journal Constitution reports that property assessments have increased between 7 to 11 percent in four of the larger counties in metro Atlanta for 2016 compared to last year. The assessments are a lagging indicator of a rebounding real estate market. Property owners whose assessments exceed fair market value may want to consider appealing if they have evidence (such as factual corrections to the property characteristics or lower values of comparable properties) to support their appeal. 

Metro Atlanta tax assessments jump, giving residents a jolt 

Gina and Michael Schwartz got a nasty surprise when their DeKalb County tax assessment arrived in the mail recently. According to the county assessor’s office, the value of their Brookhaven home rose 10 percent from last year to $318,300, though they’ve made no improvements and don’t think that’s what the market will bear. Now they’re worried about the property tax bill that will come this fall. 

“It’s unfair,” Gina Schwartz complained at a recent meeting that detailed how to appeal assessments. “Why are we paying bigger taxes when nothing changed? That’s a big jump. I don’t want to pay more money.”

The Schwartzes are among tens of thousands of metro Atlanta homeowners learning their tax assessments increased this year, which could mean paying more when property taxes are due.

In four of the five largest metro counties, the total taxable value of residential property is up 7 percent to 11 percent, a review by The Atlanta Journal-Constitution found. Some properties are up much more. The exception was Fulton County, where residential values rose just 2.6 percent. The increase for individual properties varies widely.

County appraisers say the assessments reflect a resurgent real estate market that has shaken off the Great Recession. If sales prices rise, so do tax values, they say. Even some professionals who specialize in appealing tax assessments say many taxpayers will have to adjust to new market realities.

Each year, county assessors must determine the value of tens or hundreds of thousands of properties for tax purposes, using real estate sales data and statistical methods. Those values — along with tax rates set by elected officials — determine the size of annual property tax bills.

In the wake of the Great Recession, a series of AJC investigations found typical tax assessments were too high — assessors failed to cut values fast enough to keep up with the plummeting real estate market.

But as the market recovered, the AJC found typical assessments in many areas were too low, reflecting the reality that tax assessments usually lag behind market trends.

Calvin Hicks, DeKalb’s chief appraiser, said his goal is for assessments to match prices that properties would fetch on the open market. He said residents should understand that rising assessments are driven by actual sale prices, not by a need to fatten the county government’s tax base.

“Our primary charge is to value properties and keep those values in line with whatever the market has done,” Hicks said Many individual properties may still be overvalued, and homeowners can appeal their assessments…

Read the rest of the AJC's report here.

Lowndes County tax assessors challenge state law

The Supreme Court of Georgia has heard arguments in a case that could affect property valuations of low-income housing units statewide.

The Lowndes County board of tax assessors want to be able to factor in income tax credits when assessing the value of low-income housing properties. In other words, the assessor wants to increase the property assessment because the income tax credits that are tied to the property which increases the potential resale value of such housing units. 

An apartment complex owner that rents to low-income tenants in Valdosta says that the benefits of these tax credits should not be factored under the appraiser's methodology. Attorneys for the owner say that income tax credits are intangible benefits and should not be co-mingled with the assessment of tangible property.

Existing state law prohibits assessors from considering income tax credits in their assessments. The Lowndes County assessors are challenging that law arguing that it violates the state constitutional requirement for uniformity in assessments.  They assert that, similar to rent, income tax breaks make the property more desirable, resulting in a higher fair market value. Assessors are required to consider factors that affect the fair market value. The assessors' attorneys further note that voters rejected a constitutional amendment on the same subject in 2002.

This is a complex case. It will be interesting to see how the Georgia Supreme Court rules.

Georgia community taxed out of existence?

In coastal Georgia, the Geechee residents of Sapelo Island were notified last year and again this year of property assessments that increased by 500 or 600 percent. Residents who were used to paying a few hundred dollars in property taxes now have to pay thousands.

The tax bills may cause the mostly low-income residents of Hog Hammock in Sapelo to sell their homes and eventually dissolve the African-American community that's lived on the island since the 1700s.

The McIntosh County tax assessor's hands are tied.  State law requires assessments to be based on what a willing buyer and seller would agree to in an arm's length sale.  Recent property sales in Sapelo to mainland buyers have led to the skyrocketing assessments. Sales data is an essential component of modern assessment techniques.

Therefore, in my opinion, if Hog Hammock is to be preserved, the most logical route may be through special legislation, such as preferential tax treatment of Hog Hammock as a historic district, or targeted homestead exemptions or freezes that would reduce the tax bills.

However, proposals for a Sapelo Island study committee haven't gone anywhere during previous sessions of the Georgia General Assembly.

Residents are mounting a legal challenge to their assessments which, based on my understanding of Georgia's tax code, will be an uphill climb. 

A more effective approach than hiring a lawyer may be to hire a lobbyist to help them build a broader coalition of support at the state capitol in 2014.