2021 is a revaluation year in Forsyth County. New values will be established for all real estate parcels in the county effective as of January 1, 2021. Forsyth County typically revalues property every four years, and the last cycle was in 2017.
If a property owner believes that the value is overstated on the revaluation notice, it is to the property owner’s advantage to appeal in the revaluation year, rather than waiting for a subsequent year to appeal. The reason is that an appeal that reduces the value of the property has only prospective effect — meaning that you get a benefit only for the year of appeal and future years until the next revaluation. There is no retrospective benefit.
Since 2021 is a revaluation year in Forsyth County, what do real estate owners need to know?
Forsyth County Property Revaluation Notices
Revaluation notices went out in early January. In most cases, these revaluation notices inform the property owner of the new 2021 value for their property.
In some instances, however, the value was “value pending.” The reason that the revaluation notices were sent out even without values in some cases was that the notices also serve to inform property owners of certain exemptions/exclusions they may be entitled to and to inform property owners of the appeal procedure in the event they do not agree with their value, once it is determined. Typically, a lot of commercial properties may be “value pending” because additional work is being done in order to arrive at the new value.
Residential Property Values Increasing
In contrast to commercial property owners, most residential property owners were informed of the new value for their properties in the revaluation notice. According to statements by the tax assessor:
- More than 97% of the residential properties are showing a value higher than in the last revaluation in 2017
- About 7.5% of residential properties will see increases of 50% or more.
- 20% of residential properties increased by less than 10%
- 17% of the residential properties increased between 10% and 15%
- 26% of residential properties increased between 15% and 25%
- 16% of residential properties increased between 25% to 35%
- 10% of residential properties increased between 35% and 50%.
Homes at the low end of the value range and the high end of value range increased the least, while homes in the middle of the value range increased the most.
Forsyth County Commercial Property Values Pending
Since many commercial values are still pending, no one knows the average percentage increase or the differences in increases for differing commercial property types. Certain assumptions can be made based on the news about sales of differing types of commercial property over the last several years in Forsyth County.
- Sales of apartment complexes and warehouses have been very strong and at very high prices over the last several years.
- With respect to warehouses, the continued growth of online sales is driving the need for the infrastructure to complete these sales.
- Sales of commercial retail properties (shopping centers, malls, etc.) and commercial office buildings have not been as strong. Commercial retail has been in a steady decline over the last decade given the growth of online sales and other factors. The substantial increase in online sales driven by the pandemic is only likely to increase this decline.
- The commercial office market in Forsyth County has not been in decline, as has commercial retail, but has certainly not been as robust as apartment and warehouse properties.
What Should You Do When You Receive Your Valuation Notice?
When property owners receive their valuation notice showing a new value, they should consider the new value and determine whether it makes sense to appeal. Understand foremost that the value should represent the fair market value of the property as of January 1, 2021. The fact that the value has increased substantially from the prior revaluation date of January 1, 2017 is not, in and of itself, a sufficient reason for a reduction. Again, the relevant legal question is what is the fair market value of the property as of January 1, 2021?
What if You Want to File a Property Tax Appeal?
The revaluation notice gives the property owner 30 days to file an informal appeal. There is no statutorily required informal appeal process. Therefore, the property owner is not required to go through the informal appeal process — and you could in fact skip to the next appeals level.
If the property owner provides information beyond the 30-day informal appeal deadline, the county will likely consider it. In any event, if the taxpayer has information that would indicate that the new value is overstated, it makes sense to file an informal appeal and provide such information to the county. Filing an appeal without any substantive evidence simply in hopes that the county will cut the value just to settle the case will not be successful.
If a property owner intends to appeal, the most important deadline is the deadline for filing a formal appeal to the Forsyth County Board of Equalization and Review (BER). The deadline for filing a BER appeal is June 30, 2021. Obviously, if a property owner intends to appeal and has evidence to substantiate a lower value, there is no reason to wait until later to file an appeal. However, it is important to understand that the appeal must be hand-delivered or mailed with a U.S. Post office postmark (not a postage meter postmark) no later than June 30.
Appeals to Forsyth Co. Board of Equalization & Review
The BER, which is made up of citizens of the county appointed by the county commissioners, hears all property tax appeals filed in Forsyth County. The hearing before the local board is informal — a property owner can represent themselves or can have another person, for example, an accountant, a realtor, an attorney, etc., to represent them at the meeting. However, the appearance of anyone other than an attorney will require that the property owner sign a power of attorney authorizing them to represent the property owner at the hearing.
In my experience, the Forsyth County Board is a tough nut to crack in terms of getting a property value lowered. Without some substantive evidence as to why the valuation is overstated, the Board is likely to uphold the county value. Such substantive evidence can be in the form of:
- an appraisal with a valuation date close in proximity to the January 1 revaluation date;
- examples of properties similar to the subject property that have lower tax values;
- for income producing properties, an “income approach” showing that the net-operating income of the property, when capitalized by a market capitalization rate, indicates a lower value than that reflected by the county.
It is wise to present such evidence to the county assessor's office prior to the hearing. If the parties can reach a mutually agreeable settlement as to the value, then the Board will simply ratify that agreed upon value. Otherwise, more often than not, the Board will uphold the county's value.
Appeals to the NC Property Tax Commission
If the taxpayer loses at the local board level, an appeal can be filed with the North Carolina Property Tax Commission. Because of the cost of an appraisal and the cost in attorney fees, an appeal to the PTC is generally not financially feasible unless there is a substantial disagreement between the taxpayer’s value and the county's value.
Key NC Property Tax Takeaways and Dates
If you or your business owns property in Forsyth County, be on the lookout for your revaluation notice stating the new property tax value for your property as of January 1, 2021. If you believe the value is in excess of fair market value as of January 1, 2021, consider an appeal. In that event, be aware of the formal deadline to file an appeal with the Forsyth County BER, which is June 30, 2021. In the meantime, accumulate whatever information you have to substantiate a lower value and reach out to the tax assessor's office in an attempt to settle the matter prior to the board hearing.