Hot Topic
2008 Gilmer County Property Tax Revaluations
Wednesday, June 04, 2008
Recently, the Gilmer County Tax Assessor Office sent out Change of Assessment Notices to property owners in Gilmer County.
Most property owners have seen a significant increase in their Fair Market Value. Many people fear that if their Fair Market Value doubles, their Tax Bill will double. That may or may not be the case.
The local newspaper recently calculated the annual taxes on a property assessed for $100,000 at $2,141. Some people have assumed if the property was appraised, or valued at $100,000 their tax bill be $2,141 per year.
That is not true.
A property with a Fair Market Value or Appraised Value of $100,000 would have a tax bill of $856.40.
Some people are incorrectly referring to Fair Market Value as their Assessed Value. Remember that the correct definition of Assessment or Assessed Value is as follows:
Fair Market Value X 40% = Assessed Value.
(The 40% factor listed above is an arbitrary, required calculation required by the State of Georgia Departmnet of Revenue.)
Fair Market Value has a direct relationship on your Assessed Value. As Fair Market Value increases, your Assessed Value increases.
This is important as the discussion goes forth regarding the effect that these value increases have, in regards to the Millage Rate and an individual's property tax bill. For example:
Assessed Value X Millage Rate = Tax Bill
The Tax Digest is the sum total of the value for all property in the county. The bigger part of the tax bill equation has more to do with the amount of the budget of any given County in the State of Georgia and the value of the Tax Digest. For example:
County Budgets / Tax Digest = Millage Rate
Simply put, as the Board of Education Budget and the County Commisioners Budget increases, your Millage Rate increases, as do your taxes, if the Tax Digest remains constant. If the county budgets remains constant, and the Tax Digest increases, the Millage Rate will decrease. The new, lower, Millage Rate will be applied to the higher Assessed Value. The results of those calculations will determine if your actual taxes will go up or down.
As a side note, before going any further, let's remember that the strength of this value based system of taxation, also known as AD VALOREM TAXATION is based in TRUTH.
Truth that the Fair Market Value is accurate.
Truth that the Fair Market Value is uniform between similar properties.
The truth is that, this rarely happens, Property values, historically, are typically a fraction of their "true market value" and rarely uniform between similar properties. And everybody accepts that their Assessed Values should be less than the truth.
Occasionally, the State of Georgia Department of Revenue, checks the true sales price of properties, when they do sell, against the Fair Market Value listed on the county Tax Digest for that individual property. When there is a larger than acceptable difference between the true sales price and estimated Fair Market Value, found on the Tax Digest, the State orders a revaluation for all the property in that given County. That's what has happened in Gilmer County. The results of that revaluation are seen in the new values being sent out to property owners.
The timing of these changes is horrendous. The information used to justify these new value were derived during a time of rising prices, but those values may be high during the current down turn in market values.
For the record, the date of the property's value is "as of" January 1st of any given tax year, in the case of the new 2008 Tax Values, the date of value is "as of" January 1, 2008. Actual sales prices of homes sold close to that date are extremely relevant in the appeals process.
Property owners have a limited amount of time to appeal the new Fair Market Value found on their Change of Assessment Notice. The deadline is printed on every Change of Assessment Notice.
REMEMBER THAT EVERY CALENDAR YEAR BETWEEN JANUARY 1ST AND APRIL 1ST YOU CAN "FILE A RETURN", OR APPEAL THE VALUES OF YOUR PROPERTY. YOU CAN ALSO FILE FOR ALLOWABLE EXEMPTIONS AS WELL, DURING THIS TIME. IF THIS MATTER DOESN'T GET SETTLED TO YOUR SATISFACTION, REMEMBER YOU CAN FILE A RETURN EACH YEAR BETWEEN JANUARY 1ST AND APRIL 1ST.
If you feel that your new value is different from the true Fair Market Value, appeal the valuation based on Market Value.
If you feel that your new value is different from the value of similar properties, appeal the valuation based on Uniformity.
A useful resource to research recent sales and new appraised values in the County is the Gilmer County Tax Assessor's own website.
Here is a Weblink to the website: Gilmer Tax Assessor Website
Start by finding your own property record card information. Check your property information card for accuracy regarding zoning classification, proximity to county water and sewer service, size of your lot, size of your house, age, basement size, finished basement features, garages, etc.. These are important features that affect a property's value. Make sure the data on your property card is accurate!!
There are some discrepencies in the county records, especially regarding size of living area and the existence of basements, both finished and unfinished, probably due to a change in software. Be sure the data on the property record card is accurate. There is also more detailed information regarding your property that can only be accessed by a personal visit to the Tax Assessors Office.
When you find your own property record card, click on the mapping function tab found on your property record card to see the location of your property in relationship to the properties around you. Also, there is a color coded record of land sales on the county map. Clicking on your neighbor's property and then the related property tax card page will tell you the sales price of the property and the date of sale. This is relevant information when appealing your new value based on Market Value.
To appeal your property based on Uniformity, click on different properties to find one similar to yours. Whether your property is vacant or has a home or business on it, similar properties are supposed to have similar values.
If a property, similar to yours, is valued differently, you have rights to appeal, and have the value changed.
The more familiar you become with this website the more likely pertinant information will become apparent to you. There is even a box to check to see the Aerial Photography view of your property.
The Gilmer County Tax Assessors Office has some of the most modern tools available, to work with. Those tools are also available for the county property owners to use in the Property Tax Appeals process.
Your Market Value should be based on actual sales of "comparable" or similar properties. In the recent real estate market, with sales of property slowing down, it would be easy and tempting to use Real Estate "Listing Prices" to justify Market Value.
If using Listing Prices to justify Market Value in the new valuations occurred, there is the potential for a serious flaw in the new 2008 Market Values issued by the County Tax Assessor's Office.
On June 4, 2008, I did a study of several types of properties that sold in Gilmer County in the prior 12 months. The Northeast Georgia Board of Realtors Multiple listing service was the source of the following Gilmer County sales data.
Homes with sites 3 acres and less in size, 3 bedrooms or less, 2 bathrooms or more, full unfinished basements: The ratio of Sales Price to Original Listing Price was 90.82%
Vacant Lots under 3 acres in size: The ratio of Sales Price to Original Listing Price was 72.5%
Vacant Lot sales over 10 acres in size: The ratio of Sales Price to Original Listing Price was 76.5%.
Using Listing Prices to substantiate Fair Market Value is not an acceptable method of appraising the value of real estate. Listing Prices are more often than not higher than true Market Values. The above data indicates this flawed process could inflate the indicated value of property as much as 27.5%.
Some clients of mine have noticed that the new values are very close to the actual sales price of certain homes, especially if it was a recent, 2007, purchase. If this practice of "chasing sales" was implemented in the appraisal process, it is not allowed by the Department of Revenue.
There are appraisal standards involved in the "mass appraisal" process that are quite different than "fee appraisals". Fee appraising is the term used for an individual appraisal for a specific property usually required for a bank or lending institution. A fee appraisal usually allows for a detailed inspection of the interior and exterior of a home and property. An appraisal by the Tax Assessors Office involves an exterior inspection that is much less detailed than a bank appraisal. The Tax Assessors Office is limited in their ability to accurately describe the approximately 34,000 property parcels in Gilmer County. You are well advised to make sure that they have accurate information on record, regarding your property.
That being said, the Tax Assessors Office, while limited in their ability to acquire accurate information, are obligated to use generally accepted appraisal practices to estimate Market Value. The State Department of Revenue ordered this county wide revaluation with a very short deadline. A deadline that was very close to being missed.
Personally, I have appealed the value of my property, and the process was handled very professionally. The outcome of my appeal has yet to be decided.
In my work as a Real Estate Broker and Appraiser, I have seen a great change in the Gilmer County Tax Assessors Office over the last 18 years. The office is a modern facility with up to date technology to do a competent job of serving Gilmer County. The staff is very professional and open to discussions with property owners.
I've talked to both Dawn Pruett, Chief Appraiser for Gilmer County and members of the office staff, and feel confident they are aware of the citizen concern regarding this matter, and working to satisfy both property owners concerns as well as the requirements set forth by State Law.
Hopefully, the Board of Assessors and more importantly, the Board of Equalization will address these value issues, during the Appeals Process, in a responsive, legal manner that will
reflect the Fair Market Value that existed on January 1, 2008, the appraisal date of the revaluation.
****There is another "Hot Topic Article" concerning the definition of Fair Market Value, written in 2006, further down this page.****
The Good News and Bad News About Required Soil Testing (Retroactive Zoning)
Thursday, October 04, 2007
In September of 2005, the Gilmer County Planning Commission started to enforce zoning regulations throughout Gilmer County that would, for the first time, regulate and restrict the use of land within Gilmer County.
Also, the State of Georgia Environmental Health Department is enforcing regulations on the construction of Septic Systems within the entire State of Georgia. Soil Tests are now required to get approval for a Septic System to build a house.
These two changes in the "Real Estate Marketplace" currently affect the potential use, and therefore the value of land in Gilmer County, more so than the general economy.
The State Health Department Regulations permit the construction of a septic system only when an individual piece of land has the acceptable lot size, soil type, terrain, and ground water conditions. The house, well, septic tank, drain field (and 100% of the space needed for a replacement drain field) have to fit on the piece of land and not be too close to the same features on the adjoining property.
Basically the State of Georgia will not allow the construction of a Septic System in unsuitable soil or suitable soil that is too close to a well, stream, spring, river, home, whether their on your lot or nearby. Without a Septic System Permit you cannot get a Building Permit. Without a Building Permit you cannot build a home. If you cannot build a home on a piece of land, that land may diminished in value...... the land may be worthless.
The impact of these regulations could be dramatic. You may not be able to build a home on the land you own, or the land you want to buy.
Obviously, these regulations will have less affect on land that is served by both County Water and Sewer lines.
Property that is most likely to be affected are small, steep lots with no water and sewer service. The existence of undesirable soil types and surface water (springs, creeks, and rivers) further restricts the possibility of getting a permit from the Health Department.
Subdivided property that was platted decades ago for older subdivision (Whitepath, Walnut Mountain, Coosawattee Resort, and others) that have relatively small lots, under an acre, are most likely to have issues with these new regulations.
But, without a Soil Test, you can't be sure.
I know of a 1 1/2 acre tract, way out in the Big Creek area of Gilmer County, that wouldn't "perk" (perculate water through the soil) and lost more than 2/3 of it's potential value.
In the big picture, these Regulations will benefit the world we live in. The environment, especially the water and land near development, will be cleaner. Homes won't be able to be built as close to one another as they have in the past. More trees will be left after homesites are developed. Homeowners will have more privacy.
With a closer view, these Regulations can severly impact the potential legal use, and therefore the potential value of land in Gilmer County.
THINGS TO LOOK FOR TO "GUESS" THE SUITABILITY OF LAND FOR A SEPTIC SYSTEM
SIZE OF LOT - Bigger is better, in this case. The more land you have to fit in all the components, the better. The components include Home, Well, Septic Tank, Drain Field, Replacement Drain Field, Unsuitable Soil Types, Ground Water (Springs, Creeks, Rivers) as well as the same features on adjoining land.
GROUND WATER - Springs, creeks, and rivers on the property means you have to have more land to get approval for a Septic System. The State of Georgia protects State Waters by keeping large distances between Septic Systems and springs, creek and rivers. That's the law.
WELLS - If the property gets it drinking water from a Well you will need more land to get approval for a Septic System. A Well has to be a certain distance from a Septic Drain Field, whether the drain field is on your property or it's the drain field on your neighbor's property. That's the law.
If the property gets it drinking water for the property from the County Water Department you won't need as much land for the components of an approved Septic System as you would need if you had a Well.
SLOPE OF THE LAND - The steeper the land, the harder it is to get a Septic System approved.
SOIL TYPE - Only a soil test can determine soil type. Certain soils, rock, etc. cannot support the proper drainage of a septic drain field. The soil is tested then a plan is submitted to the Health Department for approval.
The only way to know if the land can be permitted for a Septic System is to have a Soil Test performed and a plan for the system submitted for approval by the local Health Department.
THIS CAN BE DONE BEFORE YOU PURCHASE OR SELL THE PROPERTY.
The impact of Health Department Regulations on the potential future use of land, in Gilmer County, that was subdivided decades ago, and never improved, is substantial.
Lots will have to be bigger. Houses won't be built as close to springs, creeks, and rivers as they have in the past. Houses won't be built as close to one another as they have in the past.
The County Planning Commission and the County Building Department are not the controlling authority. The State of Georgia Environmental Health Department is the controlling authority.
The affect of these newly enforced Regulations has been called Retroactive Zoning. It's subtle, but substantial if it affects your potential use of the land you own or the land you want to buy. Most people are unaware of the impact of these regulations.
WHAT CAN I DO?
You can do nothing and wait. Some of the older subdivided lots will become useable again if and when the Ellijay-Gilmer County Water and Sewer Authority extends Water and Sewer lines further into the County.
But if you find yourself in the "Real Estate Marketplace, today, there are a few suggestions that I'd make to the following parties:
BUYERS- Require Soil Testing as a condition of the sale. Any professional Realtor, representing the buyer, will suggest this as a condition of sale. The cost of the test is usually $300. "The results of the test should allow the Health Department to approve a permit for a Septic System suitable for the desired improvements."
Remember the results of the Soil Test could allow approval for permitting a Septic System, but limit the size of the house that you can build on your lot.
SELLERS- More and more Sellers are supplying Soil Test Results when offering their land for sale. To their advantage, these Sellers have already proven the "permitability" and
"marketability" of the property for sale.
Have your property Soil Tested. Then you'll know what you have to sell.
If the test allows the approval for a Septic System you have improved the marketability of the land you are trying to sell.
You are also improving the likelyhood that your property will sell at closing with you knowing, you were not selling "damaged goods".
Knowing that you have a lot that that can't be approved for a Septic System is not the end of the process.
1) You can try to buy adjoining land and combine your lot with an adjoining lot in an effort to acquire enough land to get approval for a Septic System. Chances are the adjoining lot may not "perk" on it's own, but combined with your lot, you may get approval for the combined parcels. It's a way to make "something out of nothing".
2) You can try to sell the property to an adjoining property owners for the same reasons mentioned in Item #1, above).
3) You can take the Soil Test report results to the Tax Assessors Office to have your property revalued for tax purposes. Your assessment, and therefore your taxes, will be lower if the $75,000 river lot, that you might own, cannot be approved for a Septic System.
Every property in the county can be considered for revaluation "up or down", each year, by the landowner "filing a return" at the County Tax Assessors Office between January 1st and March 1st of every calender year.
There is a link to The Gilmer County Tax Assessors Office on this website. Click on the tab AREA INFORMATION LINKS to find the Weblink to THE GILMER COUNTY TAX ASSESSORS OFFICE.
Feel free to call with any questions regarding this, or any real estate matter. Jim Fox 706-889-3460
Have You Ever Wondered How Your House Got It's Address Number ?
Wednesday, November 01, 2006
When Emergency Services Departments had to determine an easy and logical way to find homes and businesses for emergency response to Police, Ambulance and Fire Calls, they turned to a tape measure.
That's right, when E-911 Address changes occured a few years back, the reason your house number changed was due to the distance your driveway is from the beginning of the road that you live on.
The E-911 Address office staff measured the distance along every road in the county to each and every driveway entrance. They assigned 1000 digits per mile and gave the corresponding distance as your address. Even numbers on the right side of the road. Odd numbers on the left side of the road. The "left or right" side of the road was always determined with your back to the beginning of the road.
For instance, if your address is 1500 Yukon Road, you driveway is located 1.500 miles from the beginning of Yukon Road on the right side of the road (1500 divided by 1000 digits per mile equals 1.5 miles. The address 1500 is an even number, so it indicates the house is on the right side of the road).
This makes it quick and easy for Police, Ambulance and Fire vehicle drivers to easily find your home. They just measure the distance from the beginning of the road to your driveway.
In some other examples, 715 Blackberry Mountain Road, would be found .715 miles (a little over 7/10ths of a mile) from the beginning of Blackberry Mountain Road on the left side of the road....remember odd numbered houses are on the left side of the road.
8001 Boardtown Road would be exactly 8 miles down Boardtown Road on the left.
Check your own address and then you should be able to tell how far you are from the beginning of your own road.
You can use a little mathematics to figure how far distant you are from your neighbor on the same road by subtracting the differences of the two addresses and dividing by 1000 to find the number of miles apart you are from one another.
A house at 7500 Chatsworth Highway is two miles away from their neighbor whose address is 5500 Chatsworth Highway (7500-5500=2000 divided by 1000 digits per mile = 2 miles difference in the distance between the two houses).
It's important that your address number is correct and clearly marked at the driveway entrance so that the folks trying to find you in case of an emergency can find you quickly.
Don't get confused if there are extra numbers at the end of a mailing address like the following: 1215 Newport Drive #4250. The #4250 refers to the Post Office Box Number the folks, who live at that house, receive their mail in, at the small "mail box stations" usually located in some gated communities like Walnut Mountain or Coosawattee River Resort. The 1215 is still the valid E-911 Address (1.215 miles down Newport Road on the left).
And now you know!
Tuesday, October 17, 2006
Real Estate related professionals, such as Accountants and Attorneys, will occasionally provide insight to Real Estate transactions and their affect on your finances in the Hot Topics Column.
1031 Like Kind Exchanges........An Attorney's View
Monday, October 16, 2006
When you are selling Real Estate, you may have the option to defer taxes on the gain from the sale of Real Estate through a "Like Kind Exchange." Sometimes a "Like Kind Exchange is referred to as a "Section 1031 Exchange" because Section 1031 of the Internal Revenue Code allows you to defer taxes on the gain from the sale of Real Estate if certain requirements are met.
The Real Estate that you are selling must be of a type that meets the criteria of Section 1031 for you to begin the process of deferring the gain. Any Real Estate contract that you enter into for the sale of Real Estate should provide that the parties will cooperate for the transaction to qualify under Section 1031 for deferment of taxes on the gain from the sale of Real Estate. You should then consult an Attorney for preparing the documents for a person to hold the proceeds from the sale of your Real Estate that meets the requirements for holding the funds for you ("Qualified Intermediary"). There should be a written "Like Kind Exchange" agreement between you and the "Qualified Intermediary" setting out what will happen in the "Like Kind Exchange" process. At closing, you will be required to sign certain closing documents along with the "Qualified Intermediary."
From the date of closing, you will have 45 days to identify property, in writing, to the "Qualified Intermediary", that you wish to purchase. Within 180 days of closing, you must close on the purchase of properties (that you previously indentified to the "Qualified Intermediary") having aggregate purchase prices exceeding the amount required by Section 1031 to be invested in qualifying Real Estate to defer income taxes on all or a portion of the gain from the sale of your Real Estate.
If you are interested in finding out more information regarding these ideas and other tax saving strategies, please contact, Barry A. Lee at
balee@ellijay.com
or at
Clark and Clark
Attorneys at Law
84 River Street
Ellijay, Georgia 30540
706-635-1010
Real Estate Transactions and Federal Income Taxes....An Accountant's View
Tuesday, September 19, 2006
Tax Benefits of Selling Your Primary Residence
According to the Tax Code, married homeowners may not have to pay taxes on up to $500,000 in Capital Gains (profit) realized on the sale of their homes if they meet certain criteria. The following rules apply:
1) The home is sold on or after May 7, 1997.
2) The home has been the principle residence for at least two of the previous five years.
3) Married homeowners, filing Joint Returns, may claim exemptions up to $ 500,000.
4) Homeowners filing Individual Returns, may claim exemptions up to $ 250,000.
5) There are some exceptions for taxpayers, who meet certain criteria, who may not have held the home for two full years.
What is a 1031 LIKE-KIND EXCHANGE ?
A 1031 (LIKE-KIND) Tax Deferred Exchange occurs when an asset, such as your Business or Real Estate investment, is sold, and replaced with a different Business or Real Estate investment.
When you complete the Exchange, you can defer (delay) payment of the Capital Gains Tax that you would normally pay at the time of sale.
If your plans include using the funds from the sale of one asset to purchase another, similar, asset, a 1031 Exchange will provide greater cash flow for your next investment than you would have through the investment of after-tax proceeds.
If you are interested in finding out more information regarding these ideas and other tax saving strategies, please contact, Andrea K. Bramlett at
landcpa@ellijay.com
or at
Land & Associates, P.C., CPA's
142 River Terrace
Ellijay, GA 30540
706-276-3700
Also, please visit our website at Land and Associates.
The Definition of Market Value
Tuesday, August 22, 2006
The Definition of Market Value
The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
This is the legal definition most appraisers sign their name to on each real estate appraisal.
In short, market value is the most probable price...prudent buyers and sellers will agree to for a property.
Emphasis on probable and prudent.
Webster's concise dictionary defines most probable as "most likely to occur". Their
definition of prudence is "practical wisdom; caution".
The Gilmer County Real Estate market is influenced by buyers from all over the world. Homes selling for $800 per square foot of living area in Southwest Florida were being replaced by homes in Gilmer County for $200 per square foot, just last year. Were those buyers of property in Gilmer County prudent?
Did those buyers have practical wisdom of the local market? Or did they buy based on emotions like fear (hurricanes) or greed ("they're selling at 1/4 of the price back home").
Did the sellers of some homes "miss the boat" that rose on the tide of quickly raising property values and sell their homes too quickly and too cheaply during a legitimate change in market values.
There is "buyer's remorse" and "seller's remorse". Neither is a comfortable feeling.
Buyer's remorse of paying "too much" may not be realized until you try to sell your home only to find out you bought "too high". Or you may talk to your new neighbor, right after moving in, and find out they bought for "way below the asking price" (what you paid) because they knew the market.
Seller's remorse of selling "too low" may not be realized until you try to replace your home at a higher, more current market price. Getting your asking price in just a couple of days on the market may be an indicator that you were asking "too low" of a price for your home.
Be a Prudent buyer and seller, by being aware of the current Real Estate market price in your area. Gaining local "practical wisdom" is as easy as watching the local paper and Real Estate sales magazines and applying some common sense.
Don't agree to pay more, for a property than the "asking" price of other similar, advertised properties. Those asking prices are usually, but not always, lower when the negotiating is over.
And unless a quick sale is your goal (Time is money, after all) why would someone consider selling below the asking price of similar, advertised properties?
Getting an appraisal on a potential investment is good way of getting historical data to indicate market value as of a given date, but it is not necessarily a good indicator of future value in a fast moving (upward or downward) market. Knowing the market trends in a fast moving market can protect your investment.
That's where your Real Estate Broker can be of assistance. Call us at 706-889-3460 if you have any questions regarding your next Real Estate transaction.