Reading this article on appraisal may be a lot like watching paint dry for some. To nip that reaction in the bud, here are some gee-whiz facts related to appraisal to get you hooked right in the beginning.
There are 40,926 parcels of appraised property in Blount County. The total appraised value of all those parcels, including land and buildings, is almost $4 billion – $3,944,958,721 to be exact.
The average value per appraised parcel, therefore, is $96,218.50. A “typical” appraised property is a 1,300-square-foot house with three bedrooms and 1.5 baths on a one-quarter to one-half acre lot. Not all of those properties would appraise for the identical amount, however. There are lots of other factors that affect the numbers.
What follows is a collection of discrete facts about appraisal: who does it, what training they have, how the process works, what the significant factors going into an appraisal are, and other related matters. Information in this article focuses mainly on residential appraisal. Priniciples for commercial appraisal are the same but the process differs in some details.
Caveat: these are just facts. Two things to remember: some facts are not especially pleasant, but they’re not aimed at making anybody look bad. They’re just facts, with no attempt made to render them either palatable or fascinating, although there are some occasionally interesting twists.
But – if you’ve always wondered about the appraisal process leading up to your property tax bill, some of the more general answers to your questions just may show up here. Specifics probably won’t, since appraisals are like snowflakes: no one is the same as another. First, a working definition: in this article, appraisal refers to the process of determining the value of real property for purposes of taxation.
First of all, who does the appraisals?
In Blount County, three trained appraisers do all the appraisals. State law allows one appraiser per 10,000 parcels. By that rule, Blount County could have four appraisers, but manages the work load with just three. The appraisers are joined by two tax analysts from the Alabama Department of Revenue, who monitor and assist with the appraisal process. Both analysts are assigned responsibility for Blount and one other county.
What training do appraisers have?
The Alabama Department of Revenue in conjunction with Auburn University’s Center for Governmental Services provides a series of in-depth training courses on the nuts and bolts of appraisal. The three- to five-day courses cover subjects such as property tax administration; real property appraisal – commercial; real property appraisal – residential; personal property appraisal; three approaches to value; and mapping.
Individuals hired as appraisers are required to take four of the five courses in the series. When they have taken the complete training regimen, and have acquired three years’ experience on the job, they may take a professional certification test given by the state, and on passing, become certified appraisers. Many do exactly that, but it’s not required to perform the job of appraiser.
There’s a joker in that deck, however. When they become fully trained and of greatest value to the county, many if not most are hired away by other counties. Why? Because their pay scales for certified appraisers are significantly higher than Blount’s. The pay for chief appraiser in three surrounding counties is more than double the $26,000-and-change salary for Blount’s highest paid appraiser. In four surrounding counties, the average pay of appraisers other than the chief appraiser is from 1.5 times to double the pay of Blount’s $22,000- $23,000 range for regular appraisers.
Who sets the pay scales for Blount County?
The Blount County Commission
What components are considered in a residential property appraisal?
• Physical components – location of property, size and shape of lot or acreage, proximity to other facilities, topography, utilities, soil and subsoil conditions, hazards and other nuisances.
• Economic components – price and rent levels, land-use patterns, new construction in area, turnover and vacancy patterns.
• Governmental components – zoning, building codes, development regulations.
• Social factors – demographic characteristics of immediate area, prevailing crime rate, neighborhood cohesiveness as indicated by community organizations, crime watch networks, garden clubs, etc.
• These components are specified in state regulations governing property appraisal for tax purposes.
Describe the steps in the appraisal process.
• identify the subject property
• define the purpose of the appraisal: in the case of appraisals done by the county, it is to serve as the basis for property taxation
• specify the date of the appraisal: conditions and trends can substantially affect value over time
• define type of value to be used: it will be market value for many properties, but may be value in use for agricultural land (more frequently called current use)
• identify scope of work: determine what type and extent of work and work, data collection, and analysis is needed to produce accurate valuations for property tax purposes
• do preliminary planning
– estimate of highest and best use
– inventory of data to be collected
– consider three approaches to value: cost, sales comparison, income
• time needed to carry out
• conduct data collection/analysis
– general data: local, regional, and national trends that may affect value, considering physical, economic, governmental and social factors – specific date: data based on observation of site and improvements – comparative data: cost, recent sales of comparable property, income information
• determine highest and best use: the use that would produce the highest value, even if different from current actual use
• apply the data collected, using one of the following approach to value:
– cost approach: based on replacement cost less depreciation – would be used for public property such as a library or zoo
– sales comparison: compare property to be appraised with similar properties that have sold recently; used with vacant land, single family residences
– income approach: based on present worth of future income derived from property, for example, from rental properties
How your property tax is computed
By Alabama law, all property is classified into one of four categories for taxation purposes. Class I (Utilities) assessment rate 30 percent; Class II (All other property) assessment rate 20 percent; Class III (Farms, owneroccupied residences, historic buildings) assessment rate 10 percent; Class IV (Private passenger automobiles and pickup trucks) assessment rate 15 percent.
To determine assessed value, multiply the appraised value by the assessment rate. For example, if your property is appraised at $100,000, you would multiply 100,000 by 10 percent: $100,000 X .10 = $10,000 assessed value. Then multiply the assessed value by the appropriate millage rate, depending on where you live. If you live in the county, outside a municipality, the millage rate is 32.5 mills or .0325. Multiply that rate by the assessed value of $10,000 (.0325 X $10,000 = $325). That yields your tax liability of $325, with no exemptions.
Other miscellaneous facts
Tax appraisals are similar to but different from fee appraisals. Fee appraisals are those done (and that you frequently pay for) by real estate companies and banks for sale and lending purposes respectively. There’s nothing specifying they have to be lower, but tax appraisals are generally somewhat lower than fee appraisals.
As a generality, the highest appraisals in the county are in the Oneonta area. Another area of high appraisals is in the area immediately adjacent to I-65 interchanges in West Blount County.
Acreage-size tracts of land appraise for less per acre than lots, and the difference is dramatic. An average acre lot might be valued at $20,000 ($20,000 per acre). An average 10-acre tract might be valued at $30,000 ($3,000 per acre). An average 100- acre parcel might be valued at $100,000 ($1,000 per acre).
Houses of the same size and same condition in the same neighborhood should appraise for similar amounts. They wouldn’t normally be identical, however, and the presence of dissimilar factors affecting the two properties could result in quite dissimilar appraisals. For example, a new house in a subdivision with restrictive covenants would appraise differently from an identical house a quarter mile away outside the subdivision that fronts a state highway and is built on a lot individually subdivided from a farm.
Every four years all taxpayers receive notices concerning appraisal of their property. Those who wish to discuss any concerns they have may go to the Revenue Commission Office at the courthouse to talk to the Revenue Commissioner or the Deputy Revenue Commissioner. Those who wish to challenge the appraisal may do so by making an appointment for a hearing before the three-member Board of Equalization. Appointments must be made during the month of June for appointments to meet during July. This is the only time during the year when appraisals or related tax computations may be appealed.
Appraisals are updated each year to reflect changing formulas or factors provided by the state. Many remain the same. Some go down, and some may increase. All taxpayers whose property is assessed at a higher rate than previously are notified by mail. At that time, they may come to the Revenue Commission Office to discuss it, or may schedule at appointment with the Board of Equalization if they wish to appeal the appraisal. Documentation that may be helpful in presenting a case to the board includes proof of the insured value, photos of improvements, fee appraisals, and related information.
Revenue Commissioner Gregg Armstrong emphasized that citizens who have concerns about property taxes or other tax matters are welcome to come discuss them with him and his staff at the courthouse at any time – not just those times designated above for Board of Equalization appeals.