UNDERSTANDING PROPERTY VALUES
The values placed on property are determined by a three-step process.
- First we send qualified appraisers out into the field to gather data on all the property in the county. They measure and sketch all the buildings and determine the condition and quality of construction. They also capture any other value-related characteristics such as heat and air conditioning, insulation, bathroom counts, and that sort of thing. As you might guess, this process takes a very long time.
- Next, all the field data is entered into our computer so that all of the property descriptions can be catalogued and used. The Sebastian County residential property record card has over 300 fields of data that we use to describe every house, and our commercial property record cards have more than twice that number of fields. All of that data can be extremely useful once it gets organized by our software.
- Finally, once all of the data has been entered into the computer, we examine every sale that occurred over the course of the final re-appraisal year.
We use the final year sales to determine the value of all property in the county as of January 1. We examine these sales very closely to determine their validity. This is an extremely 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. We do not, for example, use sales that are owner financed (they are usually higher) or that occur between related parties (they are usually lower) or any other non-typical sales. Some of you may have participated in the validation process when you filled out the sales questionnaires that were mailed to every property owner that bought property over the last two years; if you filled out the form and mailed it in, we used that data to determine the validity of your sale. 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 your property was based on typical selling prices of properties like yours or in similar neighborhoods.
Residents sometimes ask, “What about the housing market? Hasn’t the real estate market crashed?”
Because we use actual sales to determine those values, any appreciation or depreciation will be reflected in the values placed on all property. It is important to remember that our overall market grows over time, even when there are changes in the valuation of properties. We have been extremely sensitive to the current market situation when placing values on the property, and 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 are 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. If the market did go up or down, it has been reflected in the values placed on all the properties in the county.
All taxpayers who experience an increase in their property value will be notified by mail. The owners of those properties that had no change or went down in value will not be notified. 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.
- New Value: The current full appraised values of the property based on current market conditions.
- Taxable Value: The value used to calculate taxes due the following year. This number includes all caps and freezes that apply to the property. This number multiplied by the millage rate is used to calculate your taxes.
- Estimated Tax Change: This number is calculated by using the current taxable assessment and applying the current millage rate and calculating the difference in current taxes and estimated taxes. It is important to remember, the millage rate could change if there is an election or action by the Quorum Court.
The notice includes the phone number of the appraisers that have calculated these values. If you have questions about the value placed on your property, feel free to call them so they can help you understand your value.
What are the results of the reappraisal? As a general rule, most of our properties increase in value over time. For example, consider these figures from the 2010 reappraisal:
- Properties in Fort Smith went up an average of 3.56%. Of the 28,367 residential parcels, 15,424 of them went up, 11,229 went down and 1,714 remained unchanged
- Properties in Greenwood went up an average of 12.59%. Of the 3,669 residential parcels 2,678 went up, 560 went down, and 431 remained unchanged.
- Properties in Lavaca went up an average of 7.43%. Of the 463 parcels, 296 went up, 59 went down, and 108 remained unchanged.
- Properties in the rural areas varied by school district but generally went up an average of 5%.
- Overall our county values went up an average of 5.3%. Of our 50,164 residential parcels 29,261 went up, 16,242 went down, and 4,661 remained unchanged.
What about tax relief?
There are several different forms of tax relief that the law provides for us to use. These limitations help keep tax bills stabilized from year to year, as long as the property does not have any newly constructed items that were not previously on the assessment records.
There are several assessment caps intended to help taxpayers keep a stable tax bill through the real estate market ups and downs:
- A 5% cap applies to all homesteads that act as principle places of residence, and are owner occupied. Assessment values for calculating taxes can only increase 5% on those properties per year, provided there has been no new construction on the property.
- A 10% cap applies to all commercial and residential property that does not serve as principle place of residence. Assessment values for calculating taxes can only increase 10% per year, provided there has been no new construction on the property.
- Tax Freeze
It is important that taxpayers have the correct information listed at the assessor’s office. All taxpayers should check their notice to make sure they are receiving the proper credit for owner occupied property and those that are disabled or over 65.
We understand that most people are confused by the property tax system. Though it is the only true “flat tax” it can 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. Our appraisers are well qualified and will do their best to help you understand how the values were calculated.