Agenda 01-20-2026; 8-a - Minutes for November 14, 2025, November 18, 2025, November 21, 2025, December 1, 2025, and December 9, 2025 Meetings

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24 1 next to properties that have undergone extensive renovation or are income producing student 2 rentals. The conservation neighborhoods in Chapel Hill such as Northside also have restrictions 3 on how large a property can be if an older home were removed and a new home constructed. 4 These restrictions limit the potential value, and, therefore, also limit the assessed value. 5 6 On the statistical measures of vertical equity, the Tanner Group noted that the statistical analysis 7 conducted by the Tax Office included the sales data dating back to 2021. If those sales are 8 appraised using market conditions in 2024, the assessed value would likely be much higher than 9 the sale price in 2021 given market pressure that raised prices since then. Tanner would 10 recommend limiting the analysis to more recent sales data. 11 12 The sales that occured in 2021-2022 also included several vacant land sales. By the time those 13 properties were appraised, homes had been constructed on the vacant property, dramatically 14 increasing the assessed value compared to the vacant land sale price. As a result, the sales ratio 15 on those properties (assessed value divided by its sale price) would artificially elevate the price 16 related differential (PRD) measure of vertical equity. Those sales would typically be considered 17 outliers and removed from the sales data, but the Tax Office retained those sales in the measures 18 of vertical equity to represent a conservative approach. 19 20 Appeals and Neighborhood Review Dashboard and Reports 21 In an effort to provide timely updates, the Tax Office has automated several reports to track the 22 status of appeals and neighborhood reviews. The dashboard (Attachment 1) summarizes the total 23 number of informal and formal reviews completed either by the Tax Office or the Board of 24 Equalization and review. The dashboard also tracks the properties that had a change in value, 25 the dollar value of the reduction, and the percentage values were reduced for the properties that 26 had a change in value. The dashboard also shows the number of neighborhood reviews that 27 have been completed, the number of properties where the value was changed, and the dollar 28 value of those changes. 29 30 The FY 2025-26 Budget assumes a tax base reduction of 3% or$936,162,977 resulting from the 31 appeal process. Currently, the total decrease in the tax base is $293,461,748 or 0.94°/x. If the 32 tax base is reduced by more than 3%, property tax collections may not meet the budgeted amount. 33 34 The Tax Office also created three additional reports (Attachments 2, 3, and 4)that provide a more 35 granular view of appeals and value changes by neighborhood for both appeals and neighborhood 36 reviews. Attachment 4 details individual property value reductions resulting from appeals. 37 Attachments 5 and 6 are maps showing the geographic location of the informal and formal 38 appeals. 39 40 Tax Bill Adjustments 41 A change in value due to neighborhod review or an appeal will change the amount of property tax 42 due. Taxpayers who have already paid their property taxes will be issued a refund if the amount 43 is lower than their original tax bill. A notice of additional tax due is sent if the amount of the bill is 44 higher than the original tax bill. 45 46 The deadline to pay property tax bills to avoid interest penalties is January 5, 2026. Since some 47 decisions on formal appeals will occur after this date, the Tax Office will be required to pay interest 48 on refunds issued after the deadline. The amount of interest paid follows the amount of interest 49 charged for delinquent payments: 2% for January, and 0.75% for every month thereafter per NC 50 General Statute 105-360(e). 51