Appraiser Explains The Hit To Charlotte's Budget
The City of Charlotte learned this month it would receive $14 million less in property taxes than expected next year. A redo of Mecklenburg County’s flawed 2011 revaluation suddenly found property was worth much less than previously estimated. Overall, property tax value fell by $2 billion. Commercial property makes up the largest share of the dip.
“Your commercial properties are probably your largest appeals value-wise, dollar-wise, tax-wise,” says Fred Pearson, who co-owns Pearson’s Appraisal, the company hired by Mecklenburg County to revaluate the revaluation.
He says the goal is to reflect the market value of each site at the time of the original revaluation—in this case, 2011.
“And it was not a good time for the market,” says Pearson.
The recession was in full swing. Appraisers visited each site to judge the value by inspecting the property, but Pearson says there was a big chunk of information missing.
“If I had to make a recommendation, I would send letters out to the property owners requesting income and expense information. And also to any other information that may affect market value,” says Pearson. “There might be a particular reason they have high vacancies.”
In most cases, the county did not have that information from property owners, which Pearson describes as leaving appraisers blind.
When commercial property owners appealed their high assessments, they brought their income tax and expense records, and won lower—and more accurate—taxes.
Pearson says the county plans to ask for that information in its next revaluation in 2018.