Out of the 88 counties in Ohio, some of the biggest are conducting property revaluations this year. A few of the counties included in the 2017 revaluation are Franklin, Delaware, Hamilton and Butler.
“The revaluation will impact all property types including commercial, industrial and residential,” says Holly Swisher, a director at Clarus Partners. “In a revaluation year such as this, it’s highly likely that values will change. It’s important because an increase in property values brings with it an increase in annual property taxes.”
Smart Business spoke with Swisher about revaluations, what property owners can expect and what recourse they have if they feel the valuations are inaccurate.
What is the difference between a revaluation and an update?
Revaluation takes place every six years and is the process of looking at all properties in a county and adjusting their values up or down based on market activity. Updating occurs three years after a revaluation and only if there is substantial information that justifies an adjustment to the values of certain properties or areas. It’s set up so that all counties aren’t conducting revaluations at the same time — some counties choose to outsource the process to third-party appraisers, and there wouldn’t be enough resources available at one time.
What is the impact of an increase of property value?
When property values rise, the associated tax liability will also likely increase. Taxpayers rarely view this as a positive change. Property values that are set in a revaluation year remain at that level for three years, as does the increased tax liability, until an update year comes around.
Many taxpayers believe that property tax is based on what their property is worth. But it’s an appraisal that provides the best estimate of value. County revaluations are conducted using mass appraisal techniques. The adjustments applied through this process do not address the specific aspects of any one property. In many situations, an appraisal is needed to determine the correct value for a specific property.
What recourse do property owners have if they feel the valuation is incorrect?
Counties issue revaluation notices in the fall of the year that they’re revaluing. Taxpayers have 30 days to request a meeting with the county auditor to discuss the property value if they feel the value that the auditor came up with is too high. This process is considered an informal process during which property owners have the opportunity to sit down and present county auditors with information that may change their mind. If that informal process doesn’t lead the auditor to change a property’s value, the taxpayer can enter into a formal process, before the deadline of March 31 of the following year, to file a formal appeal to the county’s Board of Revision.
Taxpayers who are not familiar with the valuation should have a property tax expert look it over. The expert can provide feedback on the value and compare it to current market data to see whether or not it’s in line with comparable properties. The expert will provide a cost-benefit analysis to give the property owner a sense of how to proceed. Depending on the potential change in valuation, the cost to pursue a reduction could be more than the savings. An expert can advise property owners on the best approach.
It’s important that property owners are aware of and understand the process so they can anticipate when their property value is likely to change. Property valuation is very specific to the jurisdiction and it takes an expert with local knowledge to determine whether a property has been overvalued. An expert’s review gives property owners the best possible chance of getting a property’s value reduced.
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