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HomeMy WebLinkAboutAgenda - 02-25-2025; 7-a - 2025 Orange County Revaluation Presentation 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 20, 2025 Action Agenda Item No. 7-a SUBJECT: 2025 Orange County Revaluation Presentation DEPARTMENT: Tax Administration ATTACHMENT(S): INFORMATION CONTACT: PowerPoint Presentation Nancy Freeman, Tax Administrator, Revaluation FAQs (919) 245-2735 PURPOSE: To receive an overview of findings and plans of the 2025 countywide revaluation. BACKGROUND: The Tax Office is nearing completion of the 2025 revaluation of real property to reflect market value as of the appraisal date of January 1, 2025. Revaluations are mandated by the North Carolina General Statutes and needed 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. The Assessment Team compiles sales, data from property owners, and information from professionals for a full understanding of the Orange County real estate market. As has occurred in the past, the Tax Office contracted with an outside vendor to provide data on commercial properties in the County. Conducting a countywide revaluation takes significant effort and staff dedication. Assessment staff began working on the 2025 revaluation in 2023. Orange County has approximately 58,700 real property parcels, and each of those parcels has been reviewed to reflect a current estimate of market value. Notices providing the newly updated values will be mailed early to mid-March. An Appeal Form and a list of Revaluation Frequently Asked Questions (FAQs) will be included with each notice. A copy of the FAQs is also attached to this abstract. FINANCIAL IMPACT: There is no financial impact associated with receiving the presentation. ALIGNMENT WITH STRATEGIC PLAN: There are no Orange County Strategic Plan Goals applicable to this item. RECOMMENDATION(S): The Manager recommends that the Board receive the presentation and provide any comments and questions. 114%��W-MMOMM. ORANGE COUNTY NORTH CAROLINA 2025 Revaluation Presentation February 20 , 2025 Nancy T Freeman Orange County Tax Administrator 3 What is Revaluation ? • Process of updating real property tax assessment to market value and present-use value as of a single appraisal date • Primary goal is to equalize tax base • Re-establish the fairness of the tax burden between properties, which change in value at different rates by location and property type. • All residential and commercial land throughout Orange County and permanent structures • Does not include Personal Property which is reappraised annually ORANGE COUNTY 2 NORTH CAROLINA 4 Equalization - �'rr1 1mp Reappraisal purpose is equalization of assessed value so that all property owners pay at 100% of market value. This shows how the market value evolves in the years between revaluations. • At the 2021 revaluation, Home A is assessed at $205, 100, tax bill of $640. Home B is assessed at $295,300, tax bill of $920. • Both of these homes sell for $320,000 in 2023 • Even though both properties sold in 2023 for a higher amount, the value and tax amounts do not change for either property in 2024. As a result, in 2024 Home A is paying a property tax bill that is based on only 64% of its market value, while Home B is paying property tax based on only 92% of its market value. • At the 2025 revaluation, both homes are valued at $320,000, and the 2025 property tax bill for each home is $1 ,000. ORANGE COUNTY 3 NORTH CAROLINA 5 Commercial Appraisal • Contracting with Analytical Consultants, a local commercial real estate appraisal firm . • Analytical Consultants provided market research and sales , then they provided value estimates to County Assessment staff. • Orange County senior appraisal staff reviewed recommended values and determined the final value. ORANGE COUNTY 4 NORTH CAROLINA 6 Residential Appraisal • Residential properties valued by Orange County Appraisal Team — Each appraiser is certified by the North Carolina Department of Revenue (NCDOR) — Must pass required courses & maintain certification with continuing education — Must attend NCDOR Sales-Qualifying Training Each sale in Orange County is reviewed and categorized as qualified or non-qualified sale — "Arms Length Transaction" = Qualified Sale — Purpose is to eliminate sales not indicative of a fair market transaction — Two years of sales included in sales bank used to shape the values for the revaluation. — Sales bank is available on our website. 8,613 sales range from January 15 2021 through December 31 , 2024. ORANGE COUNTY 5 NORTH CAROLINA 7 Comparison to Other Counties ❑ Orange County estimates 49.5% increase countywide ❑ Survey of counties conducting a revaluation in 2025 show average county-wide growth of 58%, and median of 56% . ❑ Range from 25% to 88% ❑ Eighteen counties in the survey ORANGE COUNTY 6 NORTH CAROLINA 8 Mandatory Revaluation In counties with rapid property value changes, state law may require earlier reappraisals. North Carolina Department of Revenue (NCDOR) monitors the amount of change in property values by reviewing the sales ratio between revaluations. If sales ratio becomes too high or low, NCDOR mandates the county to conduct a revaluation sooner. • Orange County's marked growth in real estate prices since 2021 led the state to mandate a reappraisal by January 1 , 2025. Next reappraisal already set for 2025 but could not postpone the 2025 reappraisal. ORANGE COUNTY 7 NORTH CAROLINA 9 Neighborhood Reviews Approximately 10,000 field reviews to be completed , three times more than were completed prior to the 2021 Revaluation. ❖ 2021 Field Review Count affected by COVID restrictions ❖ Includes neighborhoods that have experienced the most appeals since 2021 ❖ Ensures no underlying issues that could affect all properties in the neighborhood ORANGE COUNTY 8 NORTH CAROLINA 10 Northside Neighborhood Conservation District • Collaboration with NC Housing Coalition and Jackson Center • Approximately 100 properties field reviewed • Building type "Designed Rental Single Unit Residence" used to identify properties designed for rental ➢ Definition: Single unit residential property designed with bedroom/bath count atypical for its size in comparison with other same sized single-family residences ➢ Example: 800 square foot residence with 4 bedrooms and 3 baths; 3 bedrooms and 2 baths is typical • Combined into two neighborhoods that include only property under the neighborhood conservation restrictions • Current sales show little to no influence based on whether the property is conforming or legal non-conforming • Based on recent sales, overall values increased 40-60% in these neighborhoods ORANGE COUNTY 9 NORTH CAROLINA 11 * Current Revaluation Results 2025 All Propertie Estimated Assessed Percentage • - hi County $29196818221147 49.5% Carrboro $3175517981993 46% Chapel Hill $12120319701637 47. 1% Hillsborough $2101815511459 45.9% Mebane $1,063, 191,851 47.4% * These values are not yet finalized. ORANGE COUNTY 10 NORTH CAROLINA 12 Current Revaluation Results (continued ) • Countywide Improved Residential Sales: Sales Ratio 99.4 COD: 8.6 Improved Commercial Sales: Sales Ratio 1 .00 COD: 7.4 Vacant Land Sales: Sales Ratio 1 .00 COD: 19.2 • Sales Ratios are verified by category of property. The ratios indicate tax assessments represent about 100% of current market sales. The coefficient of dispersion (COD) indicates the data spread, and the goal is 15 or lower ORANGE COUNTY 11 NORTH CAROLINA 13 Current Revaluation Results (continued Median Sales Coefficient of Jurisdiction Ratio Actual Dispersion Actual Countywide .90 - 1.10 99.8 5.0 - 15.0 9.4 Chapel Hill .90 - 1.10 99.7 5.0 - 15.0 8.1 Carrboro .90 - 1.10 97.0 5.0 - 15.0 9.0 Hillsborough .90 - 1.10 100 5.0 - 15.0 9.0 Mebane .90 - 1.10 101 5.0 - 15.0 4.9 ORANGE COUNTY 12 NORTH CAROLINA 14 Current Revaluation Results (continued ) 2025 Estimated Median Home Values Value Price • $490)400 $480,000 • • $539Y600 $612Y500 Chapel Hil $636YO00 $660 y 000 Hills1 • • $415Y400 $423YO00 • . - r $349Y500 $385Y500 ORANGE COUNTY 13 NORTH CAROLINA 15 Revaluation Notice Mailing Notices to be mailed mid-March , will include : ➢ Valuation Notice ➢ FAQ in English & Spanish : revaluation basics ➢ New Simplified Informal Appeal Form ORANGE COUNTY 14 NORTH CAROLINA 16 Community Outreach • Press Release February 15, 2025 • Community Outreach Events to begin in March • Reaching out to community centers, churches, civic organizations with the help of Community Relations team • Informal appeals begin in Mid-March when revaluation notices are mailed and run through April 30, 2025 • Formal appeals to the Orange County Board of Equalization and Review (BOER) begin May 1 , 2025 and run through the Board's adjournment date of July31 , 2025 ORANGE COUNTY 15 NORTH CAROLINA 17 Appeal Process • Anticipate up to 2,500 informal appeals and 750 formal appeals. • Low Appeal level for 2021 due to pandemic: 1 ,681 informal , 381 formal appeals • Reduction in value due to appeals is accounted for in the estimated tax base. Estimation based on historical percentage of reduction from prior revaluation years. • Goal to process appeals as quickly as possible to provide the best resolution for property owners and uphold fair and equitable valuation ORANGE COUNTY 16 NORTH CAROLINA 18 Appeal Assistance Review property characteristics at Real Property Search Webpage: https:property.spatialest.com/nc Zorange/#� Compare property to nearby property sales at Comper Webpage: https:,Z,/nc-orange-citizen.comper.infoZtemplate.aspx Submit appeal form included with revaluation notice, or complete appeal process online: https:,Z/appeals.spatialest.com/nc-orange#/ ORANGE COUNTY 17 NORTH CAROLINA 19 For More Information Contact the Orange County Tax Office: 919-245-2100, option 2 reval(C-D-orangecountync.gov Live chat by visiting: www.orangecountync.govZdepartments,tax/ ORANGE COUNTY 18 NORTH CAROLINA 20 Questions? N49 ORANGE COUNTY 19 NORTH CAROLINA 21 Orange County 2025 Revaluation FAQ Helpful Resources: File an Appeal Online: OrangeCountync.gov/Appeals Review your property Online: OrangeCountync.gov/PRC View Comps Online: OrangeCountync.gov/Comper Revaluation Info: OrangeCountync.gov/Revaluation What is Revaluation and why have one? Revaluation is the process of updating all property tax assessments in Orange County to reflect market value as of a set date. For Orange County, this date is January 1, 2025. During this process, the tax office reassesses all real property, including land, buildings, and improvements. North Carolina law requires counties to revalue properties at least every eight years, Orange County follows a four-year revaluation cycle. Will all property values change during a revaluation? Most likely yes. However, not all property values will change at the same percentage. Reappraisal is about the equalization of assessed value so that all property owners pay at 100%of market value.The below is an example of how this would occur over the course of several years between revaluations. • Home 1 sells for$320,000 and is assessed at $205,100, meaning Home 1 pays property tax on 64% of market value. • Home 2 sells for$320,000 and is assessed at $295,300, meaning Home 2 pays property tax on 92% of market value. For this example, let's say the property tax bills for both homes are $1,000 if the home were valued at the market value of$320,000 (sales price). Without reappraisal and equalization of value, the first home would be paying $640 in taxes while the second would be paying $920 in taxes. Will my taxes change as a result of revaluation? Your property value affects your share of taxes, but the amount you pay depends on the budget needs of your local government(county, city,fire districts, etc.). Governing boards decide on services for the year, set budgets, and adopt a tax rate to cover the costs. Your property value times the tax rate equals your taxes due. Who will do the work of reviewing properties for the revaluation? The Orange County Tax Office is mainly handling this revaluation internally,with help from appraisal consultants to gather data not accessible to staff. How are market values determined? Market data is gathered using different tools. However, the best way to value homes is by comparing sales of similar properties based on location, size, age, style, and condition. What if I disagree with my new tax assessment? Your new value notice includes instructions and an appeal form.The first step is an informal review by an Orange County Tax Office appraiser. Staff will be available to meet with property owners for this review. If further appeal is needed, a formal appeal can be scheduled with the Board of Equalization and Review. 22 Preguntas Frecuentes sobre la revaluaci6n del condado de Orange en 2025 Recursos utiles: Presentar una apelaci6n en linea: OrangeCountync.gov/Appeals Revisa to propiedad en linea: OrangeCountync.gov/PRC Ver Comps en linea: OrangeCountync.gov/Comper Informaci6n de revaluaci6n: OrangeCountync.gov/Revaluation 7 Qu6 es la revaluaci6n V por gu6 tener una? La revaluaci6n es el proceso de actualizaci6n de todas las tasaciones de impuestos a la propiedad en el condado de Orange para reflejar el valor de mercado a partir de una fecha determinada. En el condado de Orange, esta fecha es el 1 de enero de 2025. Durante este proceso, la oficina de impuestos vuelve a evaluar todos los bienes inmuebles, incluidos los terrenos, los edificios y las mejoras. La ley de Carolina del Norte exige que los condados revaluen las propiedades al menos cada ocho anos; el condado de Orange sigue un ciclo de revaluaci6n de cuatro anos. 7 todos los valores de las propiedades cambiaran durante una revaluaci6n? Lo mas probable es que si. Sin embargo, no todos los valores de las propiedades cambiaran en el mismo porcentaje. La revaluaci6n consiste en igualar el valor tasado para que todos los propietarios paguen el 100 % del valor de mercado. El siguiente es un ejemplo de c6mo ocurriria esto en el transcurso de varios anos entre revaluaciones. • La primera casa se vende par$320,000 y esta valuada en$205,100, to que significa que la primera casa paga impuestos sabre la propiedad sabre el 64%del valor de mercado. • La segunda casa se vende por$320,000 y est6 valuada en $295,300, to que significa que la casa paga impuestos a la propiedad sabre el 92%del valor de mercado. Para este ejemplo, supongamos que las facturas de impuestos a la propiedad de ambas viviendas son de $1000 si la vivienda se valora al valor de mercado de $320 000 (precio de venta). Sin la retasaci6n y la igualaci6n del valor, la primera vivienda pagaria $640 en impuestos mientras que la segunda pagaria $920 en impuestos. Mis impuestos cambiaran como resultado de la revaluaci6n? El valor de su propiedad afecta su parte de impuestos, pero la cantidad que paga depende de las necesidades presupuestarias de su gobierno local (condado, ciudad, distritos de bomberos, etc.). Las juntas directivas deciden los servicios para el ano, establecen presupuestos y adoptan una tasa impositiva para cubrir los costos. El valor de su propiedad multiplicado por la tasa impositiva equivale a los impuestos que debe pagar. 7 Qui6n hard el trabajo de revisar las propiedades para la revalorizaci6n? La Oficina de Impuestos del Condado de Orange esta manejando esta revaluaci6n principalmente de manera interna, con la ayuda de consultores de tasaci6n para recopilar datos a los que el personal no tiene acceso. 7 C6mo se determinan los valores de mercado? Los datos del mercado se recopilan mediante distintas herramientas. Sin embargo, la mejor manera de valorar las viviendas es comparando las ventas de propiedades similares en funci6n de la ubicaci6n,el tamano,la antiguedad,el estilo y el estado. 7 Qu6 pasa si no estoy de acuerdo con mi nueva evaluaci6n fiscal? Su nuevo aviso de valor incluye instrucciones y un formulario de apelaci6n. El primer paso es una revisi6n informal por parte de un tasador de la Oficina de Impuestos del Condado de Orange. El personal estara disponible para reunirse con los propietarios de las propiedades para esta revisi6n. Si se necesita una apelaci6n adicional, se puede programar una apelaci6n formal ante la Junta de Igualaci6n y Revisi6n.