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Georgia property taxes too high despite current market values and state law
ShareThisAcross metro Atlanta, Georgia, home values fell tens of thousands of dollars — sometimes hundreds of thousands — but tax appraisals did not follow them down.
In an unprecedented comparison of actual sales values vs. county tax appraisals, The Atlanta Journal-Constitution examined every residential property sale and every change in tax value in Cobb, Clayton, DeKalb, Fulton and Gwinnett counties in 2009 — about 550,000 records.
The newspaper found that, for the first time, county appraisals are higher — sometimes much higher — than property is now worth, which means that tens of thousands of homeowners are being unfairly taxed on value their property no longer holds.
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Tax appraisers refuse to use actual sales to set tax tables
Tax appraisers have routinely refused to use actual sales to set tax values, ignoring a state law that requires them to tie their estimates to what houses are worth on the open market, the AJC investigation has found. In sum, the newspaper has exposed a deeply flawed property tax system that often inaccurately values property and leaves some residents undertaxed while forcing others to pay way too much.
Tax officials took historic step to lower taxes for Georgia homeowners
Still, tax officials did take historic action in 2009. They lowered values by unprecedented amounts — $4.3 billion in tax value vanished from about 450,000 parcels in the five largest metro counties, the AJC’s analysis shows. It was a shocking experience for tax officials, who say they’d never seen tax values fall before. They had become accustomed, as had homeowners, to steady appreciation in most areas for decades.
Even so, homeowners, real estate agents, taxation experts, appraisers and lawmakers all say county tax assessors didn’t reduce appraisals nearly enough in light of the collapse of the market.
When sales values cratered, appraisals didn’t follow suit
Tax officials don’t dispute that, but they say they were reluctant to lower values as much as sales dictated because they worried about the resulting evaporation of tax revenues. And they simply didn’t believe values so low could possibly reflect the market.
Rodney McDaniel, Clayton’s chief appraiser, said this concern was impossible for him to ignore. In Clayton the median sale fell a stunning 43 percent. The county’s median appraisal change? Five percent.
“It’s going to be extremely difficult to match sales prices,” McDaniel said. “You will be severely depleting your [tax] digest.” The digest represents the total value of real estate in a county and is used to determine how much money local governments can expect from property owners.
If tax appraisals had fallen as far as sales prices, local governments would have been forced to consider the politically dangerous course of raising taxes, perhaps considerably, to make ends meet. Property taxes are the top source of local revenue for schools, cities and counties. Before this year, officials relied on them because they were supposed to be immune to economic downturns — unlike sales taxes and service fees.
That is no longer the case. Just last week, Gwinnett County settled on a 21 percent tax increase after months of arguing over higher numbers. Clayton and Atlanta also adopted tax increases this year. Clayton raised taxes by 22 percent, Atlanta a whopping 42 percent.
Burt Manning, Fulton’s chief appraiser, conceded that his office could have lowered values much more in some areas.
“If we had gone with straight distressed sales, we would have lowered values 30 or 40 percent in some areas,” Manning said. “Based on what we did at the time [in early 2009], I think we did it correctly.”
Tax appeals
How governments and taxpayers end the 2009 tax season will play out in government offices and superior courts as appeals move forward and final values are reached.
In those settings, assessors and county appraisers will be forced to defend the work they’ve done.
That process has already begun in most counties sorting through this year’s appeals.
Pruitt, Gwinnett’s chief appraiser, said his staff stands ready to defend its work. He agreed 2009 was the hardest year he has ever seen for setting values. Gwinnett reduced appraisals for about 72,000 residential parcels, about 28 percent. That means values for nearly three out of four residential parcels did not change.
“We did right by most taxpayers,” Pruitt said. “The problem is the values have continued to drop.”
Looking back, McDaniel, Clayton’s chief appraiser, said it is “easy to say, ‘Yes, we should have done more.’ At the time, it was not presented in the fashion it has been since. Yeah, we can say we can probably do more to come in line with some of this data. If we need to make adjustments, then that’s what we’ll do.”
John Adams, a real estate expert and investor who offers advice online, on the radio and in columns, including one for the AJC, said this year’s tax appeals hearings will be tense because the property owners will have overwhelming evidence that tax values are too high.
Still, he’s not confident that appeals will succeed unless owners are willing to go to court.
“I have found very little connection between the facts of the case and whether you get a reduction,” Adams said. “They don’t believe in major reductions.”
Tom Atkinson of Decatur has already learned that the hard way. He appealed the values on six rental houses he owns and has already had a hearing on one.
A house Atkinson owns on St. Patrick Street in unincorporated DeKalb was valued for taxes at $170,000 in 2008, and the county maintained that number for 2009, even though Atkinson bought it last year for $85,000.
At appeal, Atkinson came in armed with five sales that averaged $69,000 from the same neighborhood. Still, he got no relief based on those sales.
The county lowered his value to $153,000 this year only because appraisers had overlooked a creek that bisected the backyard.
“I felt like I was banging my head against the wall,” a frustrated Atkinson said. “You could argue I was the sap who overpaid.”
Source: http://www.ajc.com/news/why-youre-paying-too-228962.html?cxtype=rss_news_128746
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