Agenda - 10-05-2004-8a - Laserfiche WebLink

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2005 REVALUATION UPDATE 3 Prepared for Orange County Board of Commissioners' Meeting October 5, 2004 By late December 2004, the Orange County Assessor's Office will be mailing out approximately 50,000 notices of new real property values to all owners of real property in Orange County. These notices aze part of the process involved in the revaluation of all real property that takes effect .Ianuary 1, 2005.. These new tax values, as required by North Carolina General Statutes, are based on 100% of market value. The schedule of values as presented to the BOCC for adoption represents the standards by which values are estimated for the next four years. A schedule of values is basically a guideline that sets out dollar rates and adjustments for estimating values of heated living square feet, porch, garage areas, lazed values, etc. For most property owners, their home is their largest investment,. Since the previous revaluation in 2001, the overall Orange County real estate market has remained strong. With the application of the 2005 schedule of values, most homeowners should see that their investment has increased in value an average of 15 - 25 percent in the last four years. The revaluation process has not been completed, and analysis and fine tuning will continue for the next several months, However, current projections indicate that residential property in northern Orange County will for the most part have increases that fall within the typical range of 15 to 25 percent, but with most concentrations toward the lower end. Residential properties within the city limits and close proximity of Hillsborough and Chapel Hill will likely see higher than typical value increases. Additionally, there will be other areas within the County that see significant increases. Revaluation not only adjusts value to the current market but also equalizes tax burden according to value. With the consistently growing real estate market in Orange County, values increase every year. However, since tax value remains fixed between revaluations, market values quickly surpass tax values.. Let's say that in some areas ofthe County, the increase per year is 3 or 4 percent, In same other azeas, though, the increase may average 8 or 10 percent per year. hi that situation, after a yeaz or two, in addition to having tax values that are below the market, you have situations of inequity. Now, let's say that my house was tax valued at the last revaluation for $100,000 and that I'm paying $900 a year in taxes. My friend who lives in a different neighborhood has a house that was also tax valued for $100,000 with annual property taxes of $900.. Suppose that over the last few years my house has increased in value to $140,000 but my friend's house has only increased to $115,000. We're still both paying $900 in taxes, but I'm no longer carrying an equitable tax burden. By doing a revaluation every 4 years, Orange County is able to correct these situations of inequity. It should be noted that it has been Orange County's historical practice to pursue "revenue neutral" revaluations -the BOCC adopts lower tax rates that apply in the next fiscal year after the revaluation process produces higher overall values. Orange County has adopted a revaluation schedule that allows for revaluation every four years instead of only every eight years (the statutory minimum), as is the practice for most North Carolina counties. Orange County property owners benefit from this shorter revaluation cycle through reduced "sticker shock" and more equitable tax values.