Sebastian County’s five-year appraisal explainer

by The City Wire staff ([email protected]) 195 views 

It’s that time again; unbelievably, it has been five years since we completed a countywide reappraisal, so it’s time to do it again.

Those of us in the assessor’s office think about reappraisal all the time, but taxpayers who are only exposed to it every five years it can be confusing. It’s important to remember that Arkansas law requires our office to reappraise each property in the county every five years. This is a good thing for our taxpayers because markets change all the time, and it’s important to make our assessments as fair and equitable as possible.

The values placed on property are determined by a three step process. First we send qualified appraisers out to gather data on all property in the county. Next, all the field data is entered into our computer system. Finally, once all of the data has been entered into the computer we examine every sale that occurred over the course of the years 2013 and 2014. We use 2013 and 2014 sales to determine the value of all property in the county as of Jan. 1, 2015.

We examine these sales to determine their validity. This is an important part of the process because these sales are what we use to calculate the value placed on the majority of the property in the county. We only use sales that are typical market value sales. Once all the sales are validated, we use the good, market value sales to determine the value of similar properties in similar neighborhoods. The value placed on each property is based on typical selling prices of properties like yours or in similar neighborhoods. We had a lot of sales activity here in Sebastian County the last 2 years, so there was plenty of information on hand.

Parts of Sebastian County have seen some slow down in value appreciation, and some have not. It is important to remember that parts of our market have grown since we last placed values in 2010. We have been sensitive to the market situation when placing values on the properties in our county. Though Sebastian County never saw the huge market bubbles that were generated in the major metropolitan areas around the country (some climbing hundreds of percentage points a year), we have been fortunate not to see the huge crashes that those areas are dealing with now. One thing is certain; all of the values placed on the properties in our county are based on actual sales activity that occurred in 2013 and 2014. If the market did go up or down, it has been reflected in the values placed on all the properties in the county.

Taxpayers who have experienced an increase in their property value will be notified by mail, and those who have seen no increase or even a decrease will not receive a notice. The “notice of real estate value change” will have several numbers that will help you understand your valuations.
• Previous Value
The current full appraised value of the property described on the notice. This is in most cases the value placed on the property in 2010.

• New Value
The current full appraised values of the property based on current market conditions.

• Taxable Value
The value used to calculate taxes due in 2016. This number includes all Amendment 79 caps and freezes that apply to the property. This number multiplied by the millage rate is used to calculate your taxes.

• Estimated Taxes Based on the Taxable Value and Current Millage Rate
This number is calculated by using the taxable assessment and applying the current millage rate.  It is important to remember two things about this number. First, the millage rate could change if there is a school millage change or action by the Quorum Court.  Second, this number does not include the $350 homestead credit; remember to reduce the number by that amount if the property is your owner occupied principle place of residence.

There are several different forms of tax relief that the law provides for us to use.

• $350 homestead credit
This credit is applied to the tax statement. It applies to the property that is owner occupied and serves as the primary place of residence for the owner. The credit is only good for homestead real estate, and is good up to $350. If your tax bill falls below $350 you will only receive enough credit to cover the bill. To receive the homestead credit, the property owner has to claim the property as their homestead, you can do that at my office any time.

• Caps on assessment
We have several assessment caps intended to help taxpayers that live in the state of Arkansas. The 5% cap applies to all homesteads that act as a primary place of residence, and are owner occupied. Taxable values for calculating taxes can only increase 5% on those properties per year, provided there has been no new construction to the property. These caps stay in place until the property sells. A 10% cap applies to all property that does not serve as a primary place of residence. Taxable values for calculating taxes can only increase 10% per year, provided there has been no new construction on the property. These caps stay in place until the property sells.

• Freezes
Taxpayers that are 65 and older or are disabled have their taxable values for calculating taxes frozen on their homestead provided there has been no new construction on the property. These freezes stay in place until the property sells.

These tax relief measures are in place to help buffer the increase due to reappraisals. There are a few things that will cause the assessment limitation caps to be removed, including when the property sells, and if the property has any new construction. Other than that, the caps should remain in place on each property that experiences an increase in value.

We understand that some people may be confused by the property tax system. It can also be difficult to understand the tax relief measures in place to help keep our taxes reasonable and fair. We are sensitive to these issues and encourage you to call if you have any questions regarding your notice, or the process in general. There will be a toll free number on your notice and we encourage you to call that number if you have any questions at all. We have a contracted reappraisal firm, Total Assessment Solutions Corp (TASC), and their job is to place the values on the property and notify you of a value change. They are happy to take your call and of course, you can call our office to if you would like.

It is also important to know that if you feel that the value placed on your property is incorrect, and you would like to appeal that value you should call TASC or our office to discuss it. If you can’t reach an agreement, you may appeal to the Board of Equalization. Their job is to equalize values and make sure taxpayers are treated fairly.

Remember, if there is a mistake we want to fix it. Our job is to get it right so please let us know.

Notices of change in assessment will be mailed around the middle of July, and only those properties that have gone up in value will receive a notice, so if you do not get one, the adage “no news is good news” applies.

As your assessor, I encourage you to understand the process, and call if you have questions. We work hard in the assessor’s office and want you to be satisfied with the service we provide.