Hear our interview with Property Assessor Chuck Jeffers.
As the state mandated reappraisal for Greene County is almost upon us, Greene County Property Assessor Chuck Jeffers thought it would be a good idea to give a concise explanation of what a reappraisal is, why it’s performed, how it’s conducted, it’s laws and limitations, and outcome/impact to the property owners of Greene County. Nashville will be mailing 45,000 notices to all property owners on April 6th.
What is a reappraisal and why do we have to perform it?
Under state law, TCA 67-5-1601, the Greene County Assessor’s office is required to appraise all property every five years. All counties in the state of Tennessee are required to perform this duty. Greene County is on a reoccurring five-year cycle, which brings property values to current market values. The best indicator of current market value is qualified (willing buyer and willing seller) prior year sales, which the Assessor’s Office uses to determine reappraisal values. Reappraisal works to ensure fairness to all property owners.
As time passes some parts of the county increase in value faster than other parts. Other parts of the county may increase, but at a much slower rate. This is what causes an unequal tax base and is the exact reason why state laws require periodic reappraisals to reestablish an equitable tax base.
In this reappraisal we have observed sales skyrocketing in the last three years to values I would have never believed. Most are due to out of state, cash sales, which have transformed the real estate market. Also, our property values in the assessor’s office will remain constant from one reappraisal to the next. The current values we are using were established in the last reappraisal which was conducted in 2018, which is definitely out of touch with the current market.
How is a reappraisal conducted?
The reappraisal process consists of 4 years of monitoring and review and value calculation in the 5th year. During the review period every parcel in the county is inspected to ensure the Property Assessor’s records correctly reflect what is actually on the property. Records may be adjusted due to additions, new buildings, demolition or error correction. During the 5th year of reappraisal, properties are grouped together by property characteristics (size, quality and location). Recent sales within those groups are collected and analyzed. The information is reconciled and values are applied to each group.
The Assessor’s Office uses mass appraisal methods that are of professional standards to estimate each property’s current market value. This entire process is overseen by the State Division of Property Assessments. The primary tool for determining value is to compare like properties and their selling prices on the open market. We review hundreds of sales that are recorded each year for this purpose. By analyzing the prices paid for properties and making adjustments for differences (such as size, age, condition, etc.) the appraiser can obtain a good indication of market value for your property. The best indicator of current market value is a qualified (willing buyer and willing seller) sale.
A reappraisal is a direct reflection of current market sales. Sales are studied and values are calculated from the current sales data.
For commercial/industrial properties, we also analyze income production to determine capitalization rates and develop an income-to-sales ratio that can be applied to other properties and produce another good indication of value.
The reappraisal laws and limitations and impact to Greene County Property Owners.
A reappraisal, by law, is revenue neutral. The county cannot reap a windfall on a reappraisal year.
The intent of reappraisal is to restore equity to the property tax system so when the jurisdiction budget is set, each taxpayer only pays their genuine, fair share of the tax burden. The “Truth in Taxation” law, also known as the “Certified Tax Rate” law, requires that the new tax rate must be adjusted to produce no more revenue than the prior year (minus any new construction improvements during that prior year from the tax base). Whatever overall percentage the county values increase, the county tax rate decreases the same amount to generate the same tax revenue it did the prior year. The State Board of Equalization will take Greene County’s new values and last year’s budget to recalculate a lower tax rate, which is known as the Certified Tax Rate.
Values are mandated by State law to be equalized and brought to market value every five years in Greene County. The taxing jurisdictions must calculate a revenue neutral rate that produces the same levy as the prior year on the same parcels. So, increase or decrease after the values are brought to market depends on your individual properties change relative to the county median value. So, your value could go up and your taxes paid could drop all in the same year.
Higher values during a reappraisal do not necessarily mean higher taxes. The law requires the counties and cities to reexamine property tax rates after a reappraisal to make sure higher taxable values do not automatically result in a tax increase. Known as the certified tax rate law or “truth-in-taxation”, the law requires local governments to conduct public hearings before adopting a property tax rate that generates more taxes overall in a reappraisal year than were billed the year before at the previous year’s lower values. If the new tax rate following a revaluation does not exceed the certified rate, the average tax bill may actually remain the same. If the property value increased as the result of the revaluation more than the average, the taxes may be somewhat higher, while if the value increased less than the average, the tax bill may actually be lower in a revaluation year compared to the year before.
Once a certified rate is calculated by the legislative body and chief executive of the tax jurisdiction, and reviewed by the State Board of Equalization, it is submitted to the jurisdiction’s governing body for formal determination, usually for consideration with the budget. If the budget will require an increase above the certified rate (the revenue neutral rate), the governing body must publish notice of a public hearing on whether to exceed the certified rate and then may proceed to adopt an actual tax rate after the hearing. If the certified tax rate is exceeded, the jurisdiction must send the State Board of Equalization an affidavit of publication for the hearing notice, and a certified copy of the final tax rate ordinance or resolution.
The new certified tax rate will be the lowest tax rate in Greene Counties’ history.
Even a penny above the certified tax rate is a tax increase.
In conclusion
This letter is to inform you of all the moving parts of a reappraisal.
Here’s the meat and potatoes of the whole situation. Based on current sales data, values will be increasing dramatically. This is my 8th reappraisal in 3 different counties and will be, by far, the largest increase I have ever seen. We have calculated and recalculated all the statistical data to make sure everything is correct. Personally, I don’t like it, but the numbers don’t lie. Our overall range of increase, which includes residential, commercial and industrial is 50% to 70%. The median is 59.54%. You need to know all the facts and processes to be able to answer the questions that are coming.
I hope the information I have passed along here will help. My office is preparing for informal hearings after the notices are mailed and will be happy to speak to anyone who has a question, concern or problem. The informal hearings will lead into the County Board of Equalization which will begin on June 1st.
I have done my best to inform and educate the general public. I strive for total transparency for my office.
Just a few things I’ll leave with you;
A reappraisal is a direct reflection of current market sales. Sales are studied and values are calculated from the current sales data.
The assessor’s office does not set the budget, does not set the tax rate and we do not collect taxes. We value all property based on current sales to restore equality and to treat everyone fairly.
My office is open anytime for questions you may have and I’d love to show you the process.
Thank you for your time,
Chuck
Chuck Jeffers
Greene County Property Assessor
204 N Cutler St Suite 222 Greeneville TN 37745
423-798-1738
