Supervisors expected to lower rates to keep taxes steady
Rappahannock’s general property reassessment — conducted in a booming real estate market — is wrapped up, and notices will go out to residents Nov.10.
The anxiously awaited numbers form the basis for setting property taxes, the county’s lifeline revenue source. Assessed property values are certain to rise, reflecting the real estate rise that came with COVID-19 and a wave of homebuyers and renovators who saw Rappahannock as the ideal remote-working refuge.
The last general assessment was completed in 2016, based on data gathered in 2014 and 2015, and the state of Virginia requires updated appraisals at least every six years.
Residents have good reason to brace themselves: Zillow, the national real estate data firm, calculated that by late last summer, when the numbers were pulled together, median home values in Rappahannock had surged 23 percent to $417,448, from $340,523 at the time of the old assessments.
Compared to neighboring counties, Rappahannock’s property values — and thus, its property taxes — are high, and many residents are fretting about the new assessments.
During the Oct. 16 Rappahannock County Candidate Forum, Amissville homeowner Tommy Atkins expressed the prevailing anxiety from the floor: “I’ve not heard a word about doing anything to reduce our taxes that we have to pay as seniors. We are only on a fixed income, and we don’t have the money of the wealthy ones in the county. We can’t afford to pay the real estate property taxes; that is being carried on our backs. It’s totally unfair.”
But while residents should expect higher property assessments, they should also expect the Board of Supervisors to keep the jump in assessed values from translating into higher taxes. At the Candidate Forum, Piedmont District Supervisor Christine Smith responded, “We have to go back and lower the tax rates so that the assessments do not become an automatic tax hike for the people of Rappahannock County.” Similarly, Supervisor Keir Whitson, Hampton District, has said that property owners should be protected from the jump in taxes that would follow the expected upward assessment. A majority on the board would support lowering the tax rates to keep actual tax bills steady.
The Code of Virginia, which contains the laws of the Commonwealth, stipulates that when a general reassessment would result in a tax increase of 1% or more, the local authority should lower the rate of taxation. But this protection wouldn’t apply when a jump in value is the result of building extensions, remodeling projects or other improvements. Moreover, any local authority can, following public hearings, opt to increase the rate of taxation or let higher assessments effectively raise more taxes — though this is seldom a popular move.
With respect to retired residents like Atkins, the county offers property tax exemptions to those over the age of 65, and those who are permanently and totally disabled. The terms of the exemption also require an annual household income of not more than $32,710 and assets of $250,000 or less. The tax break is only considered for properties where residents live.
A challenging appraisal
Wingate Appraisal Service, based in Roanoke, has carried out real estate reassessments in counties throughout Virginia since 1962. But the company was challenged by the latest Rappahannock reassessment, both because of the unusual market conditions across the country, and the particular nature of Rappahannock real estate. Determined buyers from urban areas, combined with limited supply, put pressure on prices. Meanwhile, Rappahannock’s many one-of-a-kind properties make it a chronically demanding county to assess.
Wingate president Don Thomas said that the company analyzed multiple sets of real estate data and launched its property-by-property analysis in September 2020 — six months into the pandemic economy. But the pace of home purchases and remodeling projects outpaced many of those calculations, leaving the firm chasing moving targets.
In the spring and early summer of 2021 — well into the process — Wingate’s data showed median house sales closing at prices higher than the seller’s asking price, something the firm hadn’t seen since the housing boom of 2006. More recently, the prices shifted downward slightly, Thomas said, adding that “the market is starting to modulate.”
Last month, Wingate figured it was ready to wrap up the reassessment, but the firm hadn’t taken into account the latest available data for September and October. When those numbers were factored in, Thomas said, “there were adjustments,” though he didn’t say in which direction.
Underlying the market swings are the puzzling features of the county. Rappahannock’s small size makes it difficult to project market trends accurately, a challenge intensified by the county’s many uniquely sublime — or uniquely challenging — properties. Real estate agents say a descriptor like “three bedrooms and two baths on ten acres” could include everything from a sagging farmhouse overlooking an auto repair shop to an architect-designed retirement home with a postcard Blue Ridge view. “Everything is different,” Thomas said, “not like a cookie-cutter subdivision.”
Wingate considers a property’s location to be of prime importance, while other determinants include quality of construction, condition of buildings, marketability, desirability, linkage to highways, zoning and availability of utilities. In its calculations, Wingate carves out atypical sales such as those involving foreclosures or transactions within a family.
Inspectors don’t go inside houses and were careful to practice social distancing during the pandemic. This could mean they missed accents and features that would add market value when properties are put on the market.
A recent University of Chicago study found that assessments in Rappahannock and many other jurisdictions proved to be off when compared to actual sales, but with an inequitable pattern: higher priced properties tended to be assessed under their market values, while lower priced properties carried assessed values higher than the market would set. That means that more costly properties were undertaxed while smaller parcels were overtaxed. The study focused on 2016 real estate sales and hasn’t been updated.
How to appeal
Wingate’s goal is to assure that similar properties carry a similar assessment, but if property owners feel that the appraisers missed the mark, they can appeal and, if they choose, re-appeal. Here’s the process:
• After the county’s Commissioner of Revenue mails out the notices next week, property owners can present evidence and seek a reconsideration of the assessed value they receive. Wingate is involved in the appeal process at this stage, and would likely present counter-evidence the company thinks would justify the new assessment.
• A county-appointed Board of Equalization would be the next recourse if the initial hearing leaves a resident unsatisfied. A taxpayer can also choose to skip the initial hearing and go directly to the Board of Equalization.
• Residents wishing to challenge the Board of Equalization’s determinations would take their appeals to the responsible Circuit Court.
And except for appeals that succeed in overturning an appraisal, the new assessments take effect January 2022.
