Agenda 12-09-2025; 7-a - Update on Revaluation Appeals and Neighborhood Reviews

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3 The sales that occured in 2021-2022 also included several vacant land sales. By the time those properties were appraised, homes had been constructed on the vacant property, dramatically increasing the assessed value compared to the vacant land sale price. As a result, the sales ratio on those properties (assessed value divided by its sale price) would artificially elevate the price related differential (PRD) measure of vertical equity. Those sales would typically be considered outliers and removed from the sales data, but the Tax Office retained those sales in the measures of vertical equity to represent a conservative approach. Appeals and Neighborhood Review Dashboard and Reports In an effort to provide timely updates, the Tax Office has automated several reports to track the status of appeals and neighborhood reviews. The dashboard (Attachment 1) summarizes the total number of informal and formal reviews completed either by the Tax Office or the Board of Equalization and review. The dashboard also tracks the properties that had a change in value, the dollar value of the reduction, and the percentage values were reduced for the properties that had a change in value. The dashboard also shows the number of neighborhood reviews that have been completed, the number of properties where the value was changed, and the dollar value of those changes. The FY 2025-26 Budget assumes a tax base reduction of 3% or $936,162,977 resulting from the appeal process. Currently, the total decrease in the tax base is $293,461,748 or 0.94%. If the tax base is reduced by more than 3%, property tax collections may not meet the budgeted amount. The Tax Office also created three additional reports (Attachments 2, 3, and 4) that provide a more granular view of appeals and value changes by neighborhood for both appeals and neighborhood reviews. Attachment 4 details individual property value reductions resulting from appeals. Attachments 5 and 6 are maps showing the geographic location of the informal and formal appeals. Tax Bill Adjustments A change in value due to neighborhod review or an appeal will change the amount of property tax due. Taxpayers who have already paid their property taxes will be issued a refund if the amount is lower than their original tax bill. A notice of additional tax due is sent if the amount of the bill is higher than the original tax bill. The deadline to pay property tax bills to avoid interest penalties is January 5, 2026. Since some decisions on formal appeals will occur after this date, the Tax Office will be required to pay interest on refunds issued after the deadline. The amount of interest paid follows the amount of interest charged for delinquent payments: 2% for January, and 0.75% for every month thereafter per NC General Statute 105-360(e). FINANCIAL IMPACT: The contract with Tanner Valuation Group is $68,000 which was funded through a budget amendment in September. Interest paid to taxpayers on refunded taxes will impact the budget, though the amount is expected to be minimal. ALIGNMENT WITH STRATEGIC PLAN: This item supports all of the goals and objectives of the Strategic Plan as reliable and trusted tax values are fundamental in supporting all operations of County government. RECOMMENDATION(S): The Manager recommends that the Board receive the report and provide input on the content of the reports.