Citizens' Guide to the 2013 Beaufort County, SC Reassessment Program

 

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A guide to engage and inform citizens about the tax year 2013 reassessment program for Beaufort County, South Carolina.

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historic district beaufort south carolina

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county administrator s message dear citizens a state-mandated countywide reassessment of all real properties located in beaufort county will occur for tax year 2013 beaufort county last conducted a reassessment in tax year 2009 which determined the fair market value of real properties and the amounts of real estate property tax paid on those values through tax year 2012 properties will fluctuate in value with general market conditions such as supply and demand home sales prices and the state of the economy independent of a valuation date a reassessment ensures that property taxes are paid on an updated and not past fair market value of properties the beaufort county assessor s office is conducting the reassessment which will appraise all property values at fair market value as of december 31 2012 and will affect property tax bills issued by the beaufort county auditor s office around november 2013 these tax bills will reflect the newly appraised property values this guide has been designed to strengthen your understanding of the county s 2013 reassessment program and provide pertinent information which may be useful to you thank you in advance for your cooperation as we work to ensure fairness and equity in our local taxation sincerely gary kubic beaufort county administrator

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contents 2 role of the assessor s office 3 reassessment 101 and schedule of activity property tax and forecast changes in market and assessed values 5 6 maps 9 three key points 11 appeal process 13 key contacts appendix a-1 frequently asked questions a-12 terms a-17 reassessment notice example a-18 property tax calculation example

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overview 1 south carolina code of laws 12-43-217a notwithstanding any other provision of law once every fifth year each county or the state shall appraise and equalize those properties under its jurisdiction property valuation must be complete at the end of december of the fourth year and the county or state shall notify every taxpayer of any change in value or classification if the change is one thousand dollars or more in the fifth year the county or state shall implement the program and assess all property on the newly appraised values reassessment guide 2013

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role of the assessor s office an important role of the beaufort county assessor s office is to establish fair market value for all real property in beaufort county which helps to ensure that the property tax burden is shared fairly and equally to this end the assessor s office is responsible for conducting a countywide reassessment of all real property within its jurisdiction once every five years as prescribed by state law in performance of its duties the assessor s office has three main goals first to achieve accuracy in property tax assessments the assessor s office appraises all property at 100 of fair market value which enables property owners to evaluate the accuracy and fairness of their assessments in a straightforward manner if assessments differed significantly from market values property owners would have difficulty comprehending and determining the fairness of their assessments second to achieve equity in the property valuation process the assessor s office sees that all properties are assessed in a similar manner third to achieve fairness in property tax distribution to achieve fairness the assessor s office ensures that property owners share of the total property tax in beaufort county is the same as their share of the total value of property key services of the assessor s office appraises and revalues all real property in beaufort county once every five years and the year following a property sale non-exempt ownership transfer or new construction keeps records for all real property in beaufort county to include descriptions ownership sales and location data provides information education and assistance to beaufort county real property owners provides public computer access to assessment data which is also available online at the county s website annually certifies the taxable appraised and assessed valuations to the beaufort county auditor administers and provides information for 4 primary resident special assessment ratio agricultural use homeowners association special valuation developer multiple lot discount assessable transfer of interest and builder unsold unoccupied single family residential tax exemption applications updates and maintains tax maps transparency in government is essential for building public trust and is one of beaufort county s top priorities information regarding beaufort county real property and financials can be found online at www.bcgov.net reassessment guide 2013 2

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reassessment 101 the south carolina code of laws requires that once every five years all real property in every county within the state will be reappraised and adjusted to current fair market value as of december 31st of the year prior to implementing the reassessment only real property is appraised during a reassessment values of personal property such as cars and boats are adjusted on an annual basis and kept current through the beaufort county auditor s office at the direction of the south carolina department of revenue the purpose of a reassessment is to equalize the valuations of all real property in a county the five-year reassessment cycle in south carolina is an appraisal freeze only broken on property sale or change to a property the fair market value of real property is constantly changing due to factors such as location market demand the age and physical condition of a neighborhood and the state of the economy as a result non-uniformity in values occurs within tax jurisdictions whether or not property values increase or decrease for example comparable houses are now selling for less amount than at the time of beaufort county s last reassessment in 2009 when market value was determined as of the end of december 2007 the reassessment process ensures that all houses which have similar characteristics are valued consistently the property values are equalized allowing property tax to be redistributed on a more equitable basis property owners will pay no more or less than their fair share of the property tax burden early forecasts indicate that residents north of the broad river may share a greater burden of the property tax due to a shift in market value away from properties south of the broad river see forecast changes in market and assessed values on page 5 for further explanation schedule of activity april 1 2013 june 30 2013 august 1 2013 reappraisal file to beaufort county administration for budget purposes finalize reappraisal file for the sc department of revenue approval assessment notice production september 1 2013 assessment notice mailing to beaufort county property owners beaufort county council delayed the tax year 2008 reassessment program by one year as allowable by state law 3 reassessment guide 2013

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q a how is property reassessed via the mass appraisal process the assessor s office maintains a database of the physical characteristics for over 125,000 properties within beaufort county the data includes information such as heated square footage garages decks pools type and quality of construction land area water features and several other attributes required for the mass appraisal process properties are then grouped into one of approximately 1,300 appraisal models based on similar market characteristics licensed staff appraisers determine land values for each of the appraisal models based on analysis of vacant and improved property sales structural improvements to the land are valued using a market sales modified marshall swift cost service the valuations produced for each appraisal model are tested for accuracy using actual market sales after testing the result of the mass appraisal model for beaufort county is then measured against statistical standards of the international association of assessing officers if a model fails the required standards further review and refinements are necessary before acceptance commercial properties may be evaluated on rental income streams operating expenses and what kind of investment return can be reasonably expected subsequent to the valuation processes and testing the reappraisal results must be submitted to the south carolina department of revenue for further statistical testing and state approval the beaufort county assessor is then notified of the approval and program implementation to the taxpayer reassessment guide 2013 4

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property tax real property is appraised and taxed at 100 of fair market value or at the taxable capped value in south carolina property tax is the primary source of revenue for local government entities for example in fiscal year 2012 property tax represented approximately 54 of all beaufort county operating revenues which also comprised 75 of all county general fund revenues see appendix page a-11 many people believe that the county keeps all property taxes since the county issues tax bills and collects payments however this is not true to streamline the tax billing and collecting process most taxing entities such as the school district municipalities and fire districts choose to let the county bill and collect taxes once the taxes are collected the county disperses the money to the respective taxing entities by simplifying the process this way property owners receive only one property tax bill a year instead of several most of those taxing entities not county council determine how much is needed to pay for key government services through their budgeting processes once the budgets have been adopted and a resolution is passed by county council the amount of taxes to be collected is certified by the auditor s office all property owners pay a fair share of property taxes based on the taxable value of property they own the county and other taxing entities utilize property tax revenue to provide important services that help to sustain the quality of life in beaufort county forecast changes in market and assessed values most if not all real property in beaufort county has lost value since the last reassessment in 2009 values for the 2009 reassessment were based on the assessor s determination of market value as of december 31 2007 for the 2013 reassessment market values are determined as of december 31 2012 as a result of this five-year interval the assessor s current estimate shows an average loss of 30 in market value from $47.6 billion in 2007 to $33.5 billion in 2012 the market value decline in beaufort county from 2007 to 2012 is not uniform as some areas of the county dropped in market value more than other areas these changes also impact the assessed values that will be used for property tax calculations in 2013 as a result some areas in the county may pay a greater share of the tax burden while other areas may pay less this occurs on every reassessment an analysis done in the fall of 2012 revealed an average countywide decline in assessed value of 13 providing the county budget remains the same this coming fiscal year and properties where the assessed value and not market value declined by 13 will pay about the same property tax paid in 2012 properties where the assessed value declined more than 13 could expect to pay less property tax than paid in 2012 by contrast properties where the assessed value decrease was less than 13 could expect to pay more in property tax than in 2012 the analysis showed that properties located north of the broad river could pay a greater share of the property tax burden than in 2012 and property located south of the broad river could pay a smaller share please note that the analysis was conducted using tax district boundaries and tax increase or decrease is specific to each property account 5 reassessment guide 2013

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countywide 13 average decline in assessed value county area tax tax tax down even up 33 55 46 2 2 2 65 44 52 north of the broad river south of the broad river countywide source beaufort county assessor s office percentages have been rounded to the nearest whole percent and reflect forecast changes if the county budget holds at tax year 2012 levels reassessment guide 2013 6

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countywide market value losses between reassessments 2008-2012 source beaufort county assessor s office 7 reassessment guide 2013

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property tax percentage change by council district source beaufort county assessor s office percentages have been rounded to the nearest whole percent and reflect forecast changes if the county budget holds at tax year 2012 levels reassessment guide 2013 8

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three key points an increase or decrease in the appraised value of a property does not predict whether the tax bill for that property will increase decrease or remain the same here are three key points 1 you may pay higher taxes on a market value that is lower than the previous market value of your property property owners know that their market and taxable value is used to calculate their property tax bill what some find confusing is that the value is only one part of the equation for computing property tax the other variable used to compute property taxes is the tax levy which represents the budgets established by the taxing entities to cover their expenses those expenses are apportioned among all property owners according to the percentage of ownership they have in the total property values of the county thus a tax bill is dependent on both the amount of all the taxing entities levies and the proportion of the individual value to the total value of property in the community if you own 1 of the property value in a community then you will pay 1 of the tax levy the proportion of your value to the total value of the community affects your tax bill not the value number itself the county must collect a certain amount no more no less the assessor/beaufort county finance department divides that amount among all owners in proportion to the value of property they own this is the concept of uniformity and the basis for south carolina property tax law 2 a neighboring foreclosure is not an indicator that an assessment should be lowered foreclosed properties are marketed under duress and frequently sell at discount prices while there have been more foreclosure-related sales in recent years than any time during the past twenty years foreclosure sales have always been part of the market just as foreclosure-related sales are frequently not an indicator of market value when values are rising they are not necessarily an indicator of value in a declining market and are not normally considered by the assessor s office when determining the market value of property in a community in fact state law appraisal standards and the south carolina courts require very specific criteria for a sale to be considered as a reliable indicator of market value two of the most important of these criteria are whether the sale occurred under duress such as a forced sale and whether the property had adequate market exposure for example a property that sells two weeks after it is listed may have sold quickly because it was underpriced this may be an indication of a duress situation requiring closer review by the assessor s office to verify whether it was an arm s length transaction in most cases looking at non-foreclosure sales is the most reliable way to gauge what is actually happening with neighborhood values there are times when the majority of houses that are selling in a neighborhood tend to be around the same price as foreclosure-related sales in this case those sales may represent a reasonable picture of market value 9 reassessment guide 2013

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3 the property tax base in the town of smallville consists of three houses in 2012 the value of each house is $100,000 so the total size of the tax base is $300,000 the 2012 tax levy in smallville is $3,000 the 2012 property tax rate in smallville would be determined as follows property tax levy property tax base property tax rate or $3000 300,000 .01 or 1 the 2012 taxes on the houses would each be equal to the tax rate 1 multiplied by the taxable value 100,000 for each of the three houses each homeowner would pay $1,000 in property taxes 1 x $100,000 the total paid by all three homeowners would be $3,000 which is equal to the property tax levy of smallville in 2013 the values of two of the houses decrease to $90,000 while the value of the third house falls to $70,000 the total tax base of smallville would then be $250,000 90,000 $90,000 $70,000 the 2013 property tax levy in smallville remains unchanged at $3,000 thus the 2013 property tax rate in smallville would be determined as follows property tax levy property tax base property tax rate or $3000 250,000 .012 or 1.2 while the values of all three houses decreased the tax rate was increased for the town to collect the same amount of revenue the final property tax paid by each of the three homeowners would be determined as follows taxable value 90,000 90,000 70,000 $250,000 xxxx property tax rate 1.2 1.2 1.2 property tax $1,080 $1,080 840 $3,000 if home value has decreased property taxes may not necessarily go down the decline in the value of the house decreasing 30 to 70,000 was so large that it offset the impact of the tax rate increase so the property tax fell by 16 from $1,000 to $840 however with the other two houses the value decline was insufficient to offset the tax rate increase so property tax increased by 8 from $1,000 to $1,080 in all the tax reduction on the house decreasing in value 30 was offset by tax increases on the other two houses so the total amount of property tax revenue received by the town of smallville remained unchanged this example is solely intended to demonstrate the relationship between property value and tax distribution it does not reflect the effect of other factors that affect tax bill amounts such as property class assessment ratio homestead agricultural property owners association and other exemptions which play a significant role in individual property tax calculations as well with overall tax distribution reassessment guide 2013 10

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