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Real Estate Tax Assessments

Homeowners get more property tax protections

Property tax appeals will be fairer and easier to win, thanks to a new state law supported by Virginia REALTORS®.

Government authorities should operate in a fair, open and equitable manner. Unfortunately, that hasn't always been the case with respect to residential property taxes in Virginia.

That's why the Virginia Association of REALTORS® recently pushed for—and won—a new state law that gives homeowners a much better shot at challenging a local authority's wrongful or inflated assessment of a home's value for property tax purposes. Here's a summary of what this new law requires:

  • Starting in 2012, tax assessors will have to follow clear requirements in telling homeowners why their property was reassessed.
  • Homeowners who appeal a reassessment to the local Board of Equalization or circuit court will have to show only that a preponderance of the evidence supports their case. That's an easier standard than the former expectation of clear and convincing evidence.
  • If a local authority doesn't follow its own proper procedures in handling an appeal, the authority's representatives will have to speak first in the case, allowing the homeowner the advantage of responding, rather than initially presenting.

Historically, homeowners have had to go to great lengths to win an assessment appeal. Oftentimes, good comparable sales data and comparable property tax assessments weren't enough, but instead, the homeowner had to demonstrate a deliberate error on the part of the assessor. The new rules don't shift the burden of proof to the assessor, but do set a standard homeowners will be better able to meet, giving individual homeowners a fighting chance to challenge a plainly wrong assessment and resulting in fairer assessments for homeowners overall.

The basic process of assessments won't be altered. Assessors will still make the rounds of neighborhoods, periodically walking through the homes and asking homeowners questions about improvements or remodeling projects that might affect the property's value. If a property is reassessed, the assessor will have to provide proper documentation to show the correct process was followed.

The new law isn't retroactive, but since reassessments are performed more frequently these days, homeowners may have a sooner opportunity and need to exercise their new rights.

Homeowners who have questions about their property tax assessments or the appeals process should contact the local tax authority. It's also a good idea to consult a real estate lawyer if a property tax case is complicated or involves a circuit-court appeal.

Each locality follows slightly different procedures for determining real estate assessments, reviewing appeals, and determining eligibility for tax relief.

We recommend that you use this guide as a broad overview for property assessments, but that you also talk to your local real estate assessor's office to get the full story.


FAQs

1.      What is a real estate assessment?

All assessments of real property, including land and permanently affixed structures, are based on fair market value and are equitable with the assessments of comparable properties. Title 58.1-3201 of the Code of Virginia provides for the assessment of real property at 100% of fair market value. Fair market value is the probable amount a property would sell for today if exposed to the market for a reasonable period of time.

2.      Who assesses the property and how is property value determined?

Each locality has an assessor who estimates the value of the property. The assessed value of property is part of the equation that determines how much a homeowner pays in real estate taxes. The assessor does not determine the local tax rate. The assessor determines the value of a homeowner’s property by looking at the physical characteristics like square footage of land and improvements made to the structure like adding a garage. Another factor the assessor uses to determine value is location of the property. It is important to remember that the assessment is an estimation of value that is determined through sales, income, or cost data. Sometimes an individual appraisal is necessary if properties cannot be analyzed through mass appraisal.

3.      What causes real estate assessments to increase or decrease?

There are a variety of reasons that can result in an increase or decrease. Some include: changes in economic conditions; changes in the property such as structural damage or additions like a new bedroom or garage; land divisions; and re-zonings.

4.      How does the assessment affect what I pay in property taxes?

Real estate taxes are calculated by multiplying the property’s assessed value by the real estate tax rate. The real estate tax rate is determined locally.

5.      What is the difference between sales price, appraisals, and assessments?

Sale price is the price a buyer pays for a particular property. An appraisal is a detailed single property valuation and a private appraisal may be obtained any time throughout the year. Appraisals have a variety of purposes, for example, mortgage loan, sale, home equity loan, and estate valuations. An assessment is a mass appraisal of property for tax purposes. Assessments are based on large numbers of sales that are analyzed to determine values for large groups of similar properties.


How to Appeal

There are four main reasons that you may want to appeal your assessment:

  • Your locality has the wrong information about items that affect property value, such as number of bathrooms or square footage or a new structure like a garage.
  • Your assessment is too high based on evidence you have that similar properties in the area have sold for less than the estimated market value of your property.
  • Your assessment is too low and you're concerned this will affect your ability to sell your home at the price you want.
  • Your assessment is fair and accurate, but not comparable to similar properties in the area therefore making your assessment unbalanced.

Gather information

  • Contact your local assessment office.
  • Be sure you understand the deadlines and procedures for making an appeal; instructions should be on your assessment notice.
  • Research what your local real estate assessment office has on record about your property.
  • Talk to your neighbors who have similar size houses about their assessments to determine if your assessment is significantly different.
  • Compare your assessment to the price that similar size homes in your area have sold for to see if they are comparable.

Evaluate

  • Review and evaluate the data you have collected; you may find that your assessment is on target.

Review and Appeals

  • If you wish to proceed with the review and appeals process, follow the instructions given by your locality. The first step may include a review by your local real estate assessment office. If a dispute still exists after the review, you may appeal to the Board of Equalization and Assessment Review. The Board is appointed locally and it has the power to increase your assessment as well as decrease it.

Click here to learn about other issues affecting homeowners in Virginia.