WASHINGTON COUNTY : Assessor to see if some homes overappraised
Posted on Wednesday, July 9, 2008
FAYETTEVILLE — Washington County Assessor Lee Ann Kizzar wants to give a tax break to homeowners in subdivisions affected by slumping home prices.
Kizzar on Tuesday convinced the county’s Equalization Board to let her examine the price of homes sold last year and compare them with the appraised value assigned to homes in the same neighborhood on Jan. 1, 2007.
The analysis should result in a 3 percent to 5 percent property tax break for a few thousand homeowners, Kizzar predicted.
“There’s been some softening in the market,” Kizzar told board members. “The Equalization Board can order us to equalize values.” It will work like this: In a neighborhood where homes appraised for $ 200, 000 on Jan. 1, 2007, Kizzar will look at home sales later that year. If her research shows homes sold for $ 190, 000, she’ll reduce the appraised value of all homes in the subdivision to $ 190, 000.
Because annual property taxes are about 1 percent of a home’s value, it would decrease the taxes by $ 100, cutting the $ 2, 000 tax payment to $ 1, 900.
Equalization Board members spoke in favor of Kizzar’s idea.
“I think it’s admirable,” said board member Wesley Cannon.
Don Horton, a project manager for Arkansas CAMA Technology, the private company hired to appraise county property, will work with Kizzar to figure out which parcels warrant an adjustment. He’ll need at least three below-appraisal sales in a neighborhood to justify reducing the appraised values of homes, he said.
“If I don’t have sufficient sales data, I won’t be able to look at doing anything about it,” Horton said. “The one thing that I hope would excite people is that the assessor has decided to look at it and see if it can be equalized. To my knowledge, it’s not been done anywhere else in Arkansas.” Kizzar said she’ll need two to three weeks to determine which neighborhoods warrant a reduction in appraised value and the tax decrease.
Benton County Assessor Bill Moutray knew Kizzar was considering her neighborhood examination.
He thinks few homes in Benton County are selling for less than the value assigned during the most recent countywide reappraisal in 2005. A new countywide appraisal is being completed, setting property values for Jan. 1, 2009, he said.
The Skyline Report, an analysis of the Northwest Arkansas housing market by economists with the University of Arkansas at Fayetteville, showed the average price of Washington County homes increased from $ 183, 040 in 2006 to $ 191, 499 in 2007.
Information kept by the Arkansas Realtors Association shows real estate agents sold houses for $ 497 less in 2007 than they did the previous year.
Subdivisions with homes costing more than $ 200, 000 are most likely to see their appraised value reduced when Kizzar completes her research.
Horton and Kizzar completed a preliminary examination of sales to determine how many of the county’s 95, 000 parcels warrant examination. A more detailed review will involve 7, 000 to 8, 000 parcels, Horton said.
When it’s determined which parcels warrant a property tax decrease, the county intends to send letters notifying the property owner of the change.
“I’ve done my homework,” Kizzar said. “I know there are parcels that need to be adjusted. All we’ve done is enough of an analysis to know there’s an issue.” Kizzar met in April with school district administrators in Springdale and Fayetteville to describe her plan. School districts receive the majority of property tax revenue. The districts are supportive of the review.
“We want all the taxes we’re due, but we don’t want taxes to be out of line,” said Allen Williams, Springdale’s assistant superintendent for business affairs. “I think what she’s doing sounds fair.” Washington County property must be reappraised every three years, and Kizzar thinks reappraisal in 2007 hit the top of the Northwest Arkansas housing market.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville, said she favors taxation that fairly represents value.
“The far easier thing to do would be to stay on your threeyear schedule and know that it’ll all come out in the wash,” Deck said. “It’s an interesting move. Markets function best when you have a solid basis for understanding the value of things, and it sounds like she’s trying to do that.”
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