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Home My WebLink AboutAgenda 04-02-24; 4-c - 2025 Orange County Revaluation Update 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 2, 2024 Action Agenda Item No. 4-c SUBJECT: 2025 Orange County Revaluation Update DEPARTMENT: Tax Administration ATTACHMENT(S): INFORMATION CONTACT: PowerPoint Presentation Nancy Freeman, Tax Administrator, 919-245-2735 PURPOSE: To receive a high-level overview presentation on the process for the 2025 countywide property revaluation. BACKGROUND: North Carolina counties must conduct a property revaluation at least once every eight years. Orange County's last revaluation took effect January 1, 2021. With Orange County having chosen to conduct a revaluation every four years, the next revaluation will have an effective appraisal date of January 1, 2025. Tax Office staff began working on the 2025 revaluation in mid-2022. In March 2023 the Tax Office sent each owner of improved real property a Data Validation form. Property owners were asked to return the form with any corrections to the data provided. This has been a practice for the last three revaluation cycles as an effort to ensure accurate records. A revaluation is necessary to realign the values of real property throughout the County to maintain equitable and uniform property values among property owners. Market values are shaped by property sales, and the Tax Office's responsibility is to look at those sales, interpret the market data, and estimate market values for all properties within Orange County. Orange County has approximately 58,500 real property parcels, and 1,002 delineated neighborhoods. To assist with the review and revaluation of commercial properties, the Tax Office has contracted with Analytical Consultants. The schedule for commercial properties is currently on track, with all sections of Phase I having been completed. The effective appraisal date for the 2025 revaluation is January 1, 2025. Revaluation Notices are scheduled to be mailed in February or March 2025. Appeals Forms will be included with the notices. The Tax Office has recently reviewed and developed an updated Appeals Form and Instruction Sheet, with the emphasis on simplifying completion of the form. 2 The Tax Office is currently working on the 2025 Appraisal Manual, which includes information on appraisal and data collections procedures, and is required by the N.C. Department of Revenue. In addition, staff is working to complete the 2025 Schedule of Values. The Schedule of Values will be presented to the Board of Commissioners in Fall 2024, and a Public Hearing will also be set at that time. The official adoption by the Board of County Commissioners will scheduled be prior to the end of 2024. FINANCIAL IMPACT: There is no Orange County financial impact associated with receiving this presentation. SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated with receiving this presentation. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with receiving this presentation. RECOMMENDATION(S): The Manager recommends that the Board receive the presentation and provide comments or questions. ORANGE COUNTY NORTH CAROLINA 2025 Revaluation Update April 2 , 2024 Presenter Nancy T Freeman County Tax Administrator 4 What is Revaluation ? • Process of updating real property tax assessment to market value and present-use value as of a single appraisal date • Includes land and permanent structures , both residential and commercial • Does not include business personal property, motor vehicles, boats, airplanes, public utilities, which are reappraised annually. ORANGE COUNTY 2 NORTH CAROLINA 5 Why Have a Revaluation ? • Re-establish the fairness of the tax burden between properties , which change in value at different rates by location and property type . • Required by N . C . General Statute 105-286 at least every 8 years . • Resolution signed May 7 , 2013 , Orange County conducts every 4 years . ORANGE COUNTY 3 NORTH CAROLINA 6 What is market value ? • N . C . General Statute 105-283 defines market value as "the price estimated in terms of money at which the property would change hands between a willing and financially able buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of all the uses to which the property is adapted and for which it is capable of being used . ORANGE COUNTY 4 NORTH CAROLINA 7 Commercial Appraisal Process • Contracting with Analytical Consultants • Data Collection completed • Phase I of project completed • Completion of entire project in November 2024 ORANGE COUNTY 5 NORTH CAROLINA 8 Residential Appraisal • Neighborhood Delineation completed • Increase from 975 in 2021 to 1 ,002 for 2025 • Data Validation Forms — mailed prompt to review property data & notify Tax Office of corrections — mailed 44,300 March 2023, have received 3,300 responses • 20 Projects created to complete in coordination with Revaluation - 50% have been completed ORANGE COUNTY 6 NORTH CAROLINA 9 Residential Appraisal , continued Mobile Home Project Purpose : correcting mobile home classification to reflect current North Carolina General Statute Results : 185 changing classification to real property, another 195 changing classification to personal property Impacts : • For 2025, 195 owners must newly list their mobile home • Some value changes due to classification changes • Notification letters sent Fall 2024 to affected owners. • Staff to assist affected owners with 2025 listing ORANGE COUNTY 7 NORTH CAROLINA 10 Residential Appraisal , continued Mobile Home Project, continued N.C. General Statute 105-273(13)d : A manufactured home as defined in G.S. 143-143.9(6), unless it is considered tangible personal property for failure to meet all of the following requirements: 1 . It is a residential structure. 2. It has the moving hitch, wheels, and axles removed. 3. It is placed upon a permanent foundation either on land owned by the owner of the manufactured home or on land in which the owner of the manufactured home has a leasehold interest pursuant to a lease with a primary term of at least 20 years and the lease expressly provides for disposition of the manufactured home upon termination of the lease. ORANGE COUNTY 8 NORTH CAROLINA 11 Residential Appraisal , continued Current Market Conditions Mass appraisal effectiveness is measured by calculating the median sales ratio, which shows what percentage of market value is represented by current tax assessment. Current estimate of Countywide Sales Ratio: 63.9%. Median sales ratio has fallen significantly over the last three years, and this indicates that sales prices have been on the rise since the 2021 Revaluation. Tax assessments assigned January 1, 2021 are approximately 64% of current market sales. The overall percentage of increase in tax assessments will likely be higher than the increase experienced in the 2021 Revaluation. ORANGE COUNTY 9 NORTH CAROLINA 12 Residential Appraisal , continued Neighborhood Reviews To date, appraisers have conducted 6,715 field reviews in preparation for the 2025 Revaluation. This is triple the number completed prior to the 2021 Revaluation, where field review efforts were reduced by the onset of COVID. The starting point for field reviews were neighborhoods that have experienced the most appeals since 2021, in order to ensure that there are no underlying issues that would affect all properties in the neighborhood . Field reviews will continue until the end of 2024. ORANGE COUNTY 10 NORTH CAROLINA 13 Timeline — What is Left To Do • Neighborhood Delineation & Field Visits — Neighborhood Delineation completed — Current count on field visits is 6,715 and will continue through the end of 2024 . • Sales Analysis ongoing through December 2024 • Land Valuation began July 2023 , +60% completed , Goal of August 2024 with reviews continuing well after • Building of Schedules of Values: completion targeted for September 2024 ORANGE COUNTY 11 NORTH CAROLINA 14 Timeline — What is Left To Do , continued • Public Hearing and Adoption of Schedules of Values : September to December 2024 • Notices of Value mailed February — March 2025 • Appeals January — June 2025 , appeals received prior to Board of Equalization and Review Adjournment, in late June 2025, will continue to be heard after adjournment. ORANGE COUNTY 12 NORTH CAROLINA 15 Community Outreach • Key takeaway from 2021 Revaluation : need for more community involvement. We have : • increased the number of community center meetings, showcasing the revaluation process, the appeal process, and tax assistance opportunities • attended and presented at County Roadshows • created informational videos on our website — Appealing Your Value — What is Revaluation? • simplified our Appeal Form • use of Social Media to share information ORANGE COUNTY 13 NORTH CAROLINA 16 Questions ? ORANGE COUNTY 14 NORTH CAROLINA