BY BLAKE PALMER
Within Iredell County’s 2022-20 23 fiscal year budget message was a reminder that county residents will be on the receiving end of a property revaluation in 2023. The consequences of a revaluation — a process by which the county sets the assessed value of each parcel of real estate including land, buildings, and outbuildings — are likely to be a drastic increase in housing values and potentially a property tax increase.
The Board of Commissioners should delay the next revaluation by two years.
It is no secret that we are in an overvalued housing market. Home prices have soared since the beginning of the pandemic. According to a new study by RE/MAX, home prices in the Greater Charlotte area have reached a new record high. As of February 2022, prices in the Charlotte metro area were up more than 25 percent in just the past year. A Moody’s Analytics analysis recently found that Charlotte area homes are overvalued by 33 percent.
If you’ve been paying attention to the local housing market, it’s not uncommon to see homes selling within days of listing for 50 percent or more of their value prior to the pandemic. This has not been lost on Iredell County government officials. The county’s budget message recognizes that North Carolina home prices have increased 45 percent over the past two years and appears to forecast a 30 percent increase in home values for the 2023 reappraisal.
Any increase in your property’s assessed value could increase the amount you pay in property taxes depending on the county’s tax rate. For example, if your property’s assessed value increased by 20 percent and the tax rate remained the same, your property taxes would increase. Pursuant to North Carolina State Statute § 159-11(e), the County is required to publish a revenue neutral tax rate “for comparison purposes” once the revaluation is finished. In other words, this would be the rate that would bring in the same amount of revenue for the County had the reappraisal not been conducted. Under this rate, at least theoretically, your property taxes would remain close to the same. However, state law requires only that this revenue neutral tax rate be published, not that it be adopted.
Without a requirement that the revenue neutral tax rate be adopted, there is a very real possibility that homeowners will see a tax increase. However, this whole convoluted process need not occur, at least not right now. Under State Statute § 105-286, North Carolina law requires that property reappraisals be conducted at least every eight years. The same statute provides that a board of county commissioners can adopt a resolution requiring property revaluations to be conducted on a more frequent basis. This is precisely what Iredell County’s Board of Commissioners did on July 6, 1993, when the board, in a 4-1 vote, adopted a four-year cycle instead of the eight-year cycle. The only rationale from the minutes of that meeting was that the board sought “fairness and equity in distribution of the tax burden.”
Residents have been through quite an ordeal over the last two years – a pandemic, mandates, mental health crisis, job losses, small business closings, soaring home prices putting home ownership out of reach for many, and now rampant inflation. Inflation data is at its worst in about 40 years, and wage growth is not keeping pace.
Now is not the time to conduct a countywide property revaluation. Home prices are artificially inflated, and the revaluation would present the Board of Commissioners with an opportunity to raise taxes on homeowners at a time when inflation is crippling and more people are living paycheck to paycheck.
The Board of Commissioners should pass a resolution delaying the 2023 revaluation by two years at least. While no one can predict how the housing market will look in two years, it is already showing signs of a correction that could be swift and significant over the next 12 to 24 months. Allowing an opportunity for housing prices to correct would be the “fair” thing to do, which was apparently the goal of commissioners in 1993 when they chose to accelerate the property revaluation cycle. Many of our Republican commissioners claim they are against tax increases. This would be a good opportunity to prove it.
Blake Palmer lives in Mooresville. He is a former candidate for Iredell County commissioner.