By B.J. OELSCHLEGEL
On Jan. 1, 2009, Hyde County applied new assessments to each parcel on the county tax roles. These values were the result of an 18- 24 month professional study of the market and were verified as being at 100 percent of market value.
This re-evaluation was triggered by a growing discrepancy between market value and the existing county assessments.
Every year, Hyde County is obligated by North Carolina law to produce a “sales assessment ratio study.” The selling prices of each qualified property in the county are divided by their assessed value to produce a ratio. The tax office sits with the register of deeds and goes through each sale within that year.
A qualified property would be defined as any sale over $3,000 and any “arms length” sale between a willing seller and an able buyer. Not included, would be any sales within a family, any government sales, and any foreclosures or short sales.
For 2012, the ratio was 9.5 percent above market value.
When the ratio gets to more than 10 percent below market value, the state can begin to drop the assessed values of the public utilities in the county. The land where our phone tower sits or the area occupied by Tideland, along with its respective commercial personal property, such as trucks and lines would lose some amount of worth to the county.
The utility assessment went from $15 million to $22 million in 2009.
We are talking a big difference to the county. A forced drop in the assessed values will lower the tax revenues collected for these public utility parcels. It is in the bigger interest of the entire county to bring the assessments into line with market value. If the state lowered the values on utilities, wouldn’t the burden fall to the individual taxpayers to make up the slack?
So now, with property values on Ocracoke dropping by up to 30 percent of what they had been during the peak period, folks are thinking that their assessments should also be reduced.
As the agent for the owner of The Community Square, I have tried to have that assessment cut back to match not one, but three commercial appraisals done for the purpose of selling The Square. In other words, I was not making a plea based on the general fact that property values were declining. I was basing my appeal on three certified opinions of value.
The county felt the property was more valuable than the appraisers. Of course, I did not prevail. The explanation, for the negative response, had to do with the fact that my appraisals were not in the time period of the assessment. They had to be completed between Jan. 1, 2008 and Jan. 1, 2009 to affect the revaluation.
The bottom line is that we all see properties selling for less than what we would like to see and it appears that the county may need to re-examine the assessments.
The pendulum may be swinging in the other direction now. Whereas we may have had tax values that were below market value before, now the assessments are above the prices that we could expect if we were to sell our properties.
I am not the only one to make the attempt to reduce a tax value. People are demanding some relief and it only seems fair.
But don’t be fooled. Remember that the last countywide sales assessment ratio study completed for 2012 put the county at 9.5 percent above market value.
I can hear the whining now – “But that includes the entire county, and it is Ocracoke that is suffering with the dropping values!”
You have to admit we were inflated and our market was due for a correction. It appears that the county/state process of assessment works a little slower than the market.
The catch is in the county budget. If the county needs a set amount of money to pay its bills, then when you lower the assessments, the tax rate will go up to make up the same quantity of needed dollars. It’s a Catch 22. Demanding a reassessment might not get you what you want.
(B.J. Oelschlegel has lived on Ocracoke Island for more than 30 years and has worked in the real estate business for almost as long. She is a broker with Ocracoke’s Lightship Realty and a real estate columnist for The Ocracoke Observer. You can reach her by e-mail at [email protected])