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Commissioner of Revenue - Reassessment

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1. Why tax Real Property?

Real Property taxation pays for government services that citizens rely on every day. Each time you call the sheriff or fire department, have a bus pick up your child for school, each at an inspected restaurant, use a New Kent County refuse site, etc; you are using a service that is primarily funded by Real Property taxation.

2. What is the difference between real and presonal property?

For property tax purposes, real property refers to land and buildings and the rights associated with ownership. Personal property refers to automobiles, trucks, motorcycles, motor homes, trailers, semi-trailers, aircraft, and boats. Personal property can also refer to the furniture and equipment owned or used by businesses.

3. What is the difference between the sale price, an appraisal, and an assessment?

Sale price is the actual price a buyer pays for a particular property. An appraisal is a detailed single property valuation, and may be obtained any time throughout the year. An assessment is a mass appraisal of property in a jurisdiction as of January 1 for tax purposes. Assessments are based on large numbers of sales that are analyzed to determine values for large groups of similar properties.

4. If I no longer own this property, what should I do with the notice?

§ 58.1-3330 (c) of the Code of Virginia requires you to forward the notice to the new property owner.

5. Can I obtain a copy of my real estate assessment card?

Yes, real estate records are public records and can be obtained through the office of the Commissioner of the Revenue at any time during the year. Assessments are also available online through the following link.

6. If my taxes are paid through my mortgage escrow, do I have to do anything with this new assessment?

Yes. You should notify your mortgage company of your new assessment. Ask that they adjust your escrow account accordingly. Otherwise, your mortgage company will not be notified of any change in your tax amount until they receive the next tax bill.

7. How will this affect my taxes?

General reassessments are not designed to be a county-wide tax increase. This process is intended to fairly and equitably distribute the real estate tax burden among property owners in proportion to the fair market value of their real estate. The law ensures that a general reassessment cannot be the cause of an increase in taxes. Once the reassessment is complete, state law requires that the tax rate be equalized. It is the responsibility of the Board of Supervisors to determine the budgetary needs of the County and the tax rate necessary to effectively meet those needs.

8. Why does the Commissioner of Revenue’s office re-inspect my property even if nothing has changed?

A physical inspection is required to check for depreciation of a property and to certify that all the information on property record is accurate and up to date. A physical inspection of the property is also required by law at least once every six years. Even if a third of the properties are physically inspected, all properties (100%) are reevaluated in a reassessment year.

9. Why do the assessors not schedule for an appointment to come inspect a property?

New Kent County contains over 17,000 parcels that need to be reviewed at least once every six years. There are only two field inspectors at this time. In the interest of cost and time efficiency, the assessors are not able to schedule appointments to inspect a property. Several newspaper ads hare run to inform the public of the ongoing reassessment.

10. Why was my property not inspected this year?

At this time, there are only two assessors with close to 7,500 parcels with improvements that need inspection. With over 9,500 vacant properties to review, there is not enough staff to conduct a complete inspection of the county in one, or even two years.

11. Do assessors go inside the home during an inspection?

No. Reassessments are based upon finding each property’s equitable and fair share of the real estate tax burden. That is to say every taxpayer is assessed on an equal basis. The time and resources are not available for every home to have an interior inspection. Invasion of privacy is also a consideration. Certain exceptions apply if the assessor is invited into the home to review abnormal depreciation or other factors that could influence the assessment. An assessor obtains interior information through taxpayer correspondence and available historical data.

12. Do I have to allow the assessor on to my property?

The New Kent County assessor has a legal right to be on the property. However, if requested, the privacy of the taxpayer will be respected and the property will be statutorily assessed. An assessor will send a letter or leave a note if he or she cannot gain access to the property in such cases of a gate being locked, one or more children being present in the home without a parent or guardian present, etc. If there is no response, the home will be statutorily assessed.

13. What is a statutory assessment?

If an assessor cannot gain access to a property, the assessor will have to make estimation on the value of the property based upon all available information. A statutory assessment is based upon the best information available to an assessor and does not account for depreciation, materials used, etc. You will not be able to contest a statutory assessment.

14. The reassessment process has always been overwhelming. Why should I expect this year to be any different?

Assessments prior to the January 1, 2010 assessment were conducted by an independent assessment company that was contracted by the Board of Supervisors. Legally, this means the Commissioner of Revenue’s office can make judgment and opinion decisions that could not be made before. Steps are being taken to ensure a smooth process for the taxpayers. The goal is to assist the taxpayer in their understanding of the assessment process, raise public awareness, and give every opportunity to taxpayers to alert us of any inaccuracy with their property record through the use of open forums, newspaper articles, and the mailing of the property record cards. We are always open to comments and suggestions as we work to refine this process for ourselves and the taxpayers.

15. How does the Commissioner of Revenue’s office come up with a value for my assessment?

Mass appraisal is a very complicated process. An accurate real estate property record database provides the foundation for the assessments. The first step is to narrow down a list of all the sales in the jurisdiction to a list of qualified sales. An unqualified sale such as a family sale, foreclosure, gift, or short sale would not be used for the purpose of mass appraisal because it would not indicate what a typical, well-informed purchaser would be willing to pay for a property. Qualified sales are analyzed by neighborhood, condition, construction details, and other factual features to determine base price per acre and square foot for particular types of properties in particular neighborhoods, or areas. Further adjustments are made based upon right of ways, water or golf views, etc. The value of the adjustments is made by further analyzing the qualified sales.

The above description is an over-simplified translation of a very complicated process. However, while it may seem like common sense, it helps to understand that individual properties are NOT assessed individually. Onsite inspections are conducted only to verify that real estate property records are accurate and up to date. Base price per acre and square foot amounts are determined by analyzing sales in given areas and are applied to like properties in given areas to determine a value after necessary adjustments are made for special conditions on the property.

16. If I just recently sold my home, isn’t that the fair market value?

Not necessarily. One sale does not constitute market value. Sales of similar properties must also be reviewed and analyzed to determine if a single sale is an accurate estimate of fair market value.

17. Do all improvements the same age get the same amount of depreciation?

No. Depreciation adjustments may vary based upon grade and condition. Improvements that have been allowed to deteriorate would be depreciated more than well-maintained homes.

18. Do all New Kent County assessors use the same methods in assessing my home?

Yes. New Kent County assessors use the Vision Appraisal CAMA (Computer Assisted Mass Appraisal) system to assess all real estate in New Kent County.

19. Why are some properties assessed higher or lower than what they sell for?

Mass appraisal is not an exact science. Assessments may not be exactly the sale price of a property due to the limitations of exterior inspections and knowing that even comparable properties do not sell for exactly the same price. A model is developed by the Commissioner of Revenue’s office that attempts to get as many properties as close to their market value as possible. An assessor tries to monitor the properties so that assessments are fair and equitable and not in excess of market value.

20. Why is my assessment changing?

There are many reasons for a change in property values. One of the most common reasons is that real property usually appreciates in value over time. Value changes can also be a result of additions, alterations, or the demolition of improvements. Property assessments can appreciate in value if the market desirability increases, even without physical improvements.

The purpose of a reassessment is to measure the change in market value of a home as of the effective date of the reassessment. An assessor that analyzes the market for the purpose of a general reassessment does not create value. Value is established through the buying and selling of real estate on the open market. An assessor’s legal responsibility is to determine the fair market value of a property and ensure uniformity and equity amongst all properties. Even though the market is constantly changing, assessed values do not change until the next general reassessment.

21. How can a property be assessed for more than its purchase price?

Real estate may be assessed for more than the purchase price because the assessment reflects fair market value. Fair market value is not necessarily the price paid for a piece of real estate, but rather, what it is worth on the real estate market at the date of measurement. Market value is defined as the amount a typical, well-informed purchaser would be willing to pay for a property. Since the market value is determined at a place in time, market value continues to change after a sale takes place. Values also change, and the property value may have gone up since the purchase. This is especially true if a piece of real estate was purchased several years ago, or if a person happened to get a good buy because of a distress sale condition. Assessed value should represent fair market value at the time of the reassessment, which may or may not be the same as purchase price or a real estate sales price.

22. How can my land value increase at a faster rate than my house?

As more and more land is developed, the supply of available vacant land decreases, driving the sale prices of land higher. As sale prices of land increase, so does the subsequent value of all land, both improved and unimproved.

23. Do all assessments change at the same rate?

No. There are many factors that determine the fair market value of a home. Assessments in one area can rise while assessments in another area can remain the same or even decline even within a single jurisdiction such as New Kent County. There are numerous factors within an area that can determine the rate at which an assessment will change. These factors can include, but are not limited to: location, condition, size, quality, bed and bath count, etc.

24. What is a “Site” and how is it valued?

A “Site” is all or part of a parcel that is best suited for single family residential construction. Applying the concept of “highest and best use”, this part of the land parcel is worth significantly more than the residual acreage.

25. Why is the acreage of my property valued at a higher price per acre than my neighbor?

Consider the following scenario:

          Property A is valued at $70,000 with 5 acres
          Property B is valued at $295,000 with 50 acres.

Dividing the assessed value by the acreage yields an average price per acre:

          Property A: $70,000 ÷ 5 acres = $14,000 per acre
          Property B: $295,000 ÷ 50 acres = $5,900 per acre

On the surface, it would seem that these two properties are not assessed equitably. However, take what you learned regarding home sites from the previous question. Looking further into the breakdown of a property you would notice that the home site is assessed at $50,000 and each additional acre is $5,000. Therefore:

          Property A: ($50,000 home site) + (4 acres x $5,000) = $70,000
          Property B: ($50,000 home site) + (49 acres x $5,000) = $295,000

This example using fictitious numbers for demonstration purposes only is an example of how you cannot simply divide the total land assessment by the total acreage in determining equity. Please note that home site and residual acreage values differ depending upon location and special conditions that influence a property.

26. Why is the foundation of my home included in the assessment?

A home cannot be built without a foundation. In the real estate market, different types of foundations contribute different values to a property. The same home with a pier foundation will sell for a different amount than a home with a basement or a crawlspace. These factors are taken into account when determining a property’s assessment.

27. How can you tax an outbuilding that has no electricity and is not livable?

The assessed value is the sum of the value of all the factors on your property. Outbuildings such as sheds, barns, and detached garages add functionality and utility to your property, thereby increasing the market value of your parcel.

28. My house is under construction and only partially complete. Why are you not waiting until it is complete to assess me?

New construction that is not fit for occupancy is assessed at its value reflecting the percentage of completion (e.g. 50%, 75%, etc.). When the new construction is substantially completed and/or fit for use it is picked up at 100% assessment for the remaining months of the year.

29. What if my new assessment is too high?

The Commissioner of Revenue’s office has an appeal process. Please be sure to completely fill out all components of your application. Incomplete applications will be denied a hearing.

If the resulting value is still not satisfactory, the Board of Equalization will begin hearing cases after the Commissioner of Revenue’s office completes their review. If the resulting value is still not satisfactory and you wish to contest the real estate assessment further, you may present your case before the New Kent County Circuit Court. It is important to note that in order to appeal to the New Kent County Circuit Court, the taxpayer must first contest their case with the Board of Equalization. The Commissioner of Revenue’s office cannot overrule any decisions made by the Board of Equalization or the Circuit Court.

30. If my assessed value of my property goes down, will my taxes go down?

Not necessarily. The assessed value of the property determines a taxpayer’s share of the tax burden. The tax amount due is determined by the Board of Supervisors using the formula:

          Assessed Value * Tax Rate = Tax Amount Due.

Each year the Board of Supervisors will analyze the taxable base of the county and evaluate the county needs. A tax rate will then be determined for the budget year. In a reassessment year, it is possible for an assessment to go down and yet still result in a greater tax amount due.

31. Why did I receive a prorated tax bill?

A prorated bill can be a result of new construction or a correction to the real estate property record. In the case of new construction, you will receive a prorated bill for the months of completion of the construction. As required by law, the taxpayer will be notified by mail if there is an error with the property record that results in a change of assessment. If the resulting change increases the assessment, you will receive a prorated bill in the mail. In the case of a lower assessment, a refund check or an abatement of unpaid tax will result.

32. Is there tax relief for the elderly or disabled?

Yes. There is an annual application process available for the elderly or disabled who wish to receive tax relief. Please note that both exemption and deferral programs are available. The Commissioner of Revenue’s office can be contacted for detailed information regarding the requirements for these programs.

33. I live in a manufactured “mobile” home, what is the “Improvement Value” that I am taxed for?

Manufactured homes are taxed as personal property unless they have been converted over to real estate. Prior to conversion, anyone who owns their own land and places a manufactured home on it will receive a real estate bill for the assessed value of the land and any improvements (porches, decks, paved driveways, fences, etc). The land and improvements are taxed as real estate, and the manufactured home is billed separately as personal property.

34. What if I see a factual error on my property record card?

Please let the Commissioner of Revenue’s office know! Inaccuracies with the property records are not intentional and are typically the result of a clerical error. The ugly truth is that with over 12,000 detailed records to maintain, inaccuracies are inevitable. While incorrect information is present, an overwhelming majority of the information is accurate. The Commissioner of Revenue’s office can only act on the best information available to them. As such, all tax assessments are conducted with the assumption that the historical data is accurate unless an error is brought to our attention by the taxpayer or discovered by our staff. Please note that the taxpayer’s opinion of a high assessment does not constitute a factual error. Factual errors can include, but is not limited to, inaccurate information regarding square footage, construction details, special conditions on land, etc.