Taxes could go up the most for lower-value properties after Mecklenburg County revaluation
Most property owners across Mecklenburg County will see a big jump in their tax bills after the revaluation this year. But the heaviest burden could fall on owners of lower-priced homes.
On average, county staff told commissioners at their budget retreat Friday that home values doubled over the past four years in historically lower income neighborhoods east, west and north of uptown. In wealthier neighborhoods, where home values were higher to start with, they increased by much less, said county manager Dena Diorio. The highest priced homes went up an average of only 49%.
"Those homes that have the lowest values in our county had the highest increases in their values, and that's because of where they're located in the crescent," she said, referring to the historically lower-income arc of neighborhoods just outside Charlotte's center. "They're located close to uptown. And those are the neighborhoods that are gentrifying."
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Commissioners warned that paying for schools, parks and other community needs will require higher taxes. But even under a hypothetical scenario in which the county doesn’t try to collect more money than it did last year, the owner of what’s now a $139,700 house would see their bill increase by $278.
The owner of what's now a $420,000 house would still pay a higher total bill, but the increase would be less. Their bill would rise by $177.
Commissioner Leigh Altman said she is worried about the implications.
"This slide you have up portends a real shock and convulsion to properties and the lowest third of the community. And all of us are, I think, very concerned that the leap in values are going to harm the most economically fragile in our community," she said.
Friday’s numbers are preliminary estimates. Property value notices go out in March, and commissioners will then set the actual tax rates.
Property tax bills are a function of a couple of factors: how high Mecklenburg County and the towns set the tax rate, the value of your individual property. Under a "revenue neutral" scenario, the county would collect the same amount of money that it did last year, but the revaluation would redistribute the tax burden among property owners. Owners whose value goes up more than the average would see higher tax bills, while those whose value goes down or only at the average could see bills fall or stay the same.
Mecklenburg County used to do revaluations for all of its approximately 400,000 parcels every eight years, but has shortened that cycle to every four years. The most recent revaluation covers 2022, a year when real estate prices boomed and homes sold for record prices.
Here are some key numbers from Mecklenburg tax assessor Ken Joyner:
- Home values across the whole county rose an average of 59% since 2019. The median price for a single family home is now $434,000.
- The bottom 1/3-priced houses increased faster though, rising an average of 89% as people bid up prices for starter homes.
- Under a revenue-neutral hypothetical, the county's property tax rate would go down because of the increase in total values. A house at the lowest 1/3 of the price distribution (just under $140,000 in 2019) would pay $278 more for a total bill of $1,318; A house in the middle of the distribution ($232,600 in 2019) would pay $223 more for a total bill of $1,836; and a house in the top third of the distribution ($420,000 in 2019) would pay $177 more, for a total bill of $2946.
But county commission chair George Dunlap said given the needs of the county — and the cities and towns that set their own tax rate — revenue neutral is unlikely.
"If you come in saying we want revenue neutral, then you're also saying we're not going to be able to pay for schools, we're not going to be able to pay for additional services," said Dunlap. "I want to make that clear."