Appeals for property tax in Henderson County.
1. What are the Laws that govern taxation and appeals in North Carolina?
The Legislative Act that covers property taxes in North Carolina is called the Machinery Act of North Carolina and it is subchapters II, III and IV of Chapter 105 of the General Statutes of the State.
2. What is the appeal process?
There are many people who think they can appeal their tax bill. While anyone can appeal, it is not really accurate that they can successfully appeal. The law requires people within the State, those that claim residency in the State, and those that own real estate with the State to pay the taxes that are levied. What you can appeal, however, is the assessed valuation of your property. The appeal process depends on what you are appealing. The first thing you need to do is submit an Appeal request to the County Assessor. The form can be found on the menu page called “Forms and Applications” accessed at the Tax Office main page. The form is called “Board of Equalization and Review”. (For brevity, the “Board of Equalization and Review” is “BOER”.)
a. Real Property Assessment. Real property appeals must be filed between January 1st and the adjournment of the BOER. The BOER typically adjourns by the third Monday in May, and we recommend you file your appeal well before that date. Appeals for assessments of Real Property (even if you have filed an appeal to the BOER) may be informal with the Assessor’s office prior to the formal appeal before the BOER. See NCGS 105-296(i). An informal appeal gives you the opportunity to learn how the Assessor’s office came to their determination of value and you can provide documentation that provides the necessary evidence for the Assessor to consider a revision of the valuation.
An example would be if the assessor assumed your home had a finished basement and it does not, you could provide pictures showing the actual unfinished status (and thus lower value).
If, after meeting with the assessor’s staff, you still disagree with the assessment, you can still request a formal hearing before the BOER. See NCGS 105-322 for how the BOER is tasked to do its job. The formal appeal is a “Quasi-judicial” hearing. This means that it follows the general form of a trial with a presentation of evidence, rebuttals, and cross examination by the Board. The party making the appeal has the burden of proof! This means it is up to you to prove by greater weight of evidence (not the “beyond the shadow of a doubt” standard for criminal trials) that the county has not correctly valued your property. See below about further information about proving your case.
b. Personal and Business Personal Property (excluding motor vehicles). Appeals for property that is not considered Real Property (land and structures permanently affixed to the land) are handled slightly differently than Real Property. See NCGS 105-317.1(c). An appeal may be filed within 30 days after the date of the initial notice of value, or upon receipt of the tax bill if no other notice is received. Unlike Real Property, where the informal process is voluntary, a conference must be arranged with the Assessor’s office to present evidence or argument regarding the taxability or value of this sort of property. The Assessor has 30 days after the conference for his/her final decision. If the taxpayer disagrees with the Assessor’s decision, he/she has 30 days from date of notice to request review by the BOER. If the property is the product of “Discovery” by the Assessor’s office, the taxpayer also has 30 days to file an “exception” (see NCGS 105-312) from the date of notice. The assessor must arrange a conference to discuss the taxpayer’s claim. After that conference the Assessor gives notice of his decision, and the taxpayer has 15 days to elevate the exception (now referred to as an appeal) to a formal hearing by the BOER.
c. Motor vehicles. Motor vehicle assessment and taxing is done through the North Carolina Department of Revenue (DOR). The Assessor’s office becomes the government representative for tax inquiries, refunds, prorating, and appeals, but works primarily from DOR data. Taxpayers have 30 days before and after taxes are due on the vehicle to appeal the appraised value, the vehicles status as exempted or excluded for taxation (limited to certain circumstances. See NCGS 105-330.1 to 105-330.7) and vehicle location issues. Like personal property, the process starts with a conference with the assessor. If a Taxpayer does not agree with the Assessor’s decision, he/she has 15 days to request a formal appeal in writing. Please note: when a taxpayer appeals a motor vehicle tax bill, they must still pay the tax shown on the notice when it is due. If the appeal results in an adjusted tax, a refund will be issued.
d. Tax Relief Decisions. The rules covering appeals of the Present Use Value (PUV) program are covered under NCGS 105-277.4(b1). If the Assessor determines that a PUV property is no longer eligible under that program, the owner has 60 Days after the decision to file an appeal. Tax relief issues are unique, so we suggest you call the Tax Office Tax Relief office at 828 698 3005 to discuss your individual situation and options.
3. How does a Formal Appeal to the BOER work?
Formal Appeals to the BOER are done in a hearing room in front of a Board that normally has 5 people on it, including the Chairperson who runs the meeting. There is also a Clerk to the Board who keeps records, distributes evidence, and administers oaths. Typically, appeals are scheduled throughout the day with about a half hour set aside for each appeal. The Chairperson will read the following statement to all the appellants in the room:
“I would first like to let you know that this is what is referred to as a quasi-judicial proceeding. What that means is that we will utilize procedures designed to ensure that you receive the protections of due process and equal protection afforded to you by our constitutions, and that all procedures and laws of the State of North Carolina are applied in a fashion that is both legal and fair. This is similar to a court proceeding, but we as a Board are not bound by all of the rules of evidence and procedure usually applied in a court. You should understand that you, as the taxpayer, bear the burden of establishing to this Board by the greater weight of the evidence that the relief you seek in your appeal is supported by law and fact. Board members cannot vote based upon their personal perceptions of what might be kind, just, or right. Instead, the Board is bound to interpret the facts based upon true and substantial evidence, to apply the laws of the State of North Carolina as they exist on this day, and to render a fair and impartial decision thereon. You will be allowed to present evidence, both in the form of testimony and written documents. Understand that documents asserting opinions may be rejected by the Board as hearsay if not supported by live sworn testimony. That is a discretionary decision for the Board. You should present your entire case when allowed to do so. After you have presented your case, the Assessor’s Office will be allowed to present the evidence of Henderson County. That evidence may serve to rebut evidence presented by you. If it seems to do so, you will be given the opportunity to present rebuttal evidence thereafter. All witnesses presented are subject to examination, or cross examination, by both the Board and yourself. Members of the general public who are not parties to this proceeding will not be allowed to examine witnesses. After all evidence is received, I will close the evidence. The evidence will then be submitted to the Board for discussion and deliberation. After that is concluded, a decision will be made unless the Board determines that for just cause the decision should be delayed for more study. After a decision is made, a Notice of Decision will be prepared and delivered to you by mail, together with an explanation of your rights to appeal. With all of that said, please present your case.”
The appeal process has a series of rules that are followed by the Board and the Clerk to the Board:
1. The BOER appeal process is a scheduled docket of hearings. The members of the BOER are volunteers that must convene to hear the cases, so the scheduling dates are not flexible. The Clerk of the Board has limited flexibility for rescheduling, so we will consider a one-time continuance per appeal for unavoidable conflicts, subject to scheduling limitations.
2. Remote hearings will be allowed only if approved by the BOER in advance for exceptional personal circumstances such as medical constraints or dire family issues that limit travel options.
3. Remote hearings and continuances for issues of convenience will not be considered. This includes the appellant or their representative living remotely from Henderson County.
4. Appraisal reports and all supporting documents need to be submitted not later than 10 business days prior to the scheduled hearing to allow for adequate review prior to the event.
5. Other supporting documents involving opinions of value must be supported by testimony of the author under oath at the hearing. All evidence, including that from real estate agents and brokers, mortgage representatives, insurance representatives, and other similar agents that offer public services in the real estate industry, will be allowed, or not, and if allowed, weighed in light of the Rules of Evidence.
6. Third party appraisal and property evaluation services such as Zillow, Redfin, Trulia, Realtor.com, Movoto and others use algorithms that are not compatible with state professional standards for appraisal and will not be considered as evidence.
7. Comparable tax value assessments do not carry the same amount of weight as appraisals using the sales comparison approach. Sales comparison appraisals will expressly state and take into account all the differences between even very similar properties, whereas a tax value assessment of a property (which may be even next door) does not state what differences are present, and so don’t give a basis for a one for one comparison.
8. Powers of Attorney documents must be presented to the Board in advance of the hearing for anyone presenting evidence on behalf of the appellant. This refers to tax advisors, family members who are not listed as owners or others who speak in place of the owners. This does not include other witnesses.
9. Appellants will have 15 minutes to present their case; the county will have 10 minutes to present their case. Afterwards, there will be 5 minutes for rebuttal and questions. The Board may elect to ask further questions, then there will be a discussion among the board members and a decision made by majority vote of the Board. Some time adjustments may be made for appeals involving multiple parcels, complex commercial properties, or other non-typical circumstances.
Summary of the proceedings process and free advice
As an example, only, in a typical case the appellant has 15 minutes to present their case, and the county responds with their case for about 10 minutes. After that, the appellant typically is given the opportunity to ask questions regarding the county’s evidence by the BOER Chairperson. The BOER may ask some questions of either party after that point. When the Chairperson decides enough information has been exchanged, he will “call for a motion” at which time one of the board members will make a motion to either accept the appellant’s proposed valuation of the property, or to accept the county’s value. The motion is then seconded and voted upon. The entire process normally takes anywhere from 20-40 minutes. There are a few things to keep in mind about the process:
a. The BOER will select between the appellant’s valuation and the county’s valuation. It will not compromise or negotiate with either party.
b. The North Carolina Rules of Evidence are very clear (and will be discussed below). Non-expert opinions other than that of the property owner do not carry any weight. If you think the county’s valuation is wrong, the burden of proof is upon you to prove it. You must provide something more substantial than your opinion. The law assumes the county assessment is correct. It is up to you to prove “by great weight of evidence” that it is not.
c. You must submit any documents upon which you intend to rely to prove value at least ten business days in advance of your hearing. It is best to provide copies of written evidence in advance. Showing up with a stack of paper is not reasonable for the Board to consider in a half hour. Remember that in a revaluation year, there are hundreds of appeals. Submissions that are concise and straightforward will more likely prevail rather ones that are lengthy and poorly organized.
d. You don’t have to have a lawyer to appeal, but it helps to think like one. A prepared, clear, concise presentation of facts will beat an angry, wordy, vague statement of facts mixed with opinions. Statements about national trends and editorial opinions in major publications carry no weight with the Board.
e. A calm, deliberate manner will be appreciated by the Board. Sometimes appellants show up with a combative tone and make a lot of angry statements. This doesn’t help your case and could result in removal from the hearing room.
4. What are my options if I want to appeal findings of the County Board of Equalization and Review?
If you disagree with the ruling of the BOER, you can appeal to the North Carolina Property Tax Commission (PTC). The PTC is overseen by the North Carolina Department of Revenue and consists of 5 members selected by the governor and the Department of Revenue. Any appeal to the PTC is “de novo” meaning that it starts on a clean slate and nothing from the BOER hearing is considered. You can appeal in person (though a web-based hearing is frequently offered) or you have the option to retain an attorney. The Assessor’s office has information to explain the PTC process. Please note: North Carolina Courts will reject any filing concerning tax appeals without proof of a final decision from the PTC (NCGS 105-290 Case notes, King v. Baldwin, and Brock v. North Carolina Property Tax Commission).
Addendum: Some advice about presenting evidence for your Appeal
The UNC School of Government has given some guidance to help appellants. This guidance does not guarantee the outcome of the Board’s decision, but is intended to demonstrate what kind of evidence supports the “Greater weight of evidence” standard for a decision:
a. Sales information of comparable properties. Comparable sales prior to the assessment date (1 January) are the gold standard of evidence. The challenge is to find which properties are truly comparable and how to account to any differences in the valuation. The tax office offers a program on its web page to help you see comparable properties. Go to the page called on-line tools and click “Spatialist”. Enter your address and follow the tabs to get the information you need. https://property.spatialest.com/nc/henderson#/
b. Listing information of comparable properties. This is lesser evidence but can be submitted to support Comparable Sales evidence. Local real estate company websites typically have an updated posting of listed properties.
c. Assessment data of comparable properties. Again, this is lesser evidence but can be useful to use with Comparable Sales evidence. Go to on-line tools and click the link for “Go Maps”. There is a wealth of information in the Go Maps (known generally as the GIS Map system). It takes some exploring to find things but it’s worthwhile to use. https://www.hendersoncountync.gov/gis/page/welcome-gomaps-henderson-coun...
d. An independent fee appraisal, with an effective date of value as of 1 January of the reappraisal year. This is a very powerful piece of evidence, but it costs hundreds or possibly even thousands of dollars to have done. Also, while not required, it can be helpful if the appraiser is present to explain or defend his/her appraisal. This may be the strongest of all evidence but may not make economic sense. Using older appraisals, like from a mortgage application, do not carry the same weight because of changing market conditions and may be considered irrelevant by the Board.
e. Photography depicting a condition affecting the value of the property. This can be very valuable, and it helps if the photos can be dated to prove how recent they are.
f. Any fact-based document that can be relied upon to demonstrate the difference between the taxpayer’s claim of value and the county’s. Examples would be a fire marshal’s report, an insurance company’s report, income tax returns, lease agreements, etc. See the appeals rules 4 and 5 above. A licensed professional like an appraiser or a civil engineer can submit documents with their certification stamp. All others, including real estate agents, need to be present to provide testimony that can be cross-examined for their documents to carry weight.
g. A note about “comparable sales”. Investopedia describes comparable sales as; “Comparable sales, often referred to as "comps," are properties that have recently sold and are similar to the subject property in terms of relevant characteristics such as location, size, style, age, condition, and amenities.” Great care needs to be taken when selecting “comps”. Unless one is working with a new development with identical homes, it is rare to find exact same properties to make comparisons. Different markets have big influences on value as well. There is a big difference between “price” of a home and “value” of a home. For example, if 4 homes are built identically and sold originally for $350,000, then 3 years later, one home sells for $390,000 but another sells for $375,000 and the other two never change hands, the value of the homes (so long as they are physically identical) is still equal, even if the price of the last sales are different. The next appraisal will consider that along with the overall behavior of the market in that area along with the relative condition of the homes. Also, identifying sales as “arms-length transactions” is important. If a home is sold under a distressed situation like a foreclosure, or if a sale is between two close relatives, or as a group purchase (e.g., If one vacant lot goes for $10,000, but if someone buys six lots and get a discount of $5,000 for a total of $55,000), then they are disregarded as “comps”. Please know that all these factors are considered in your property assessment.
This list is not all-inclusive, and each appeal is different. The NC Department of Revenue has a document on their website called “Appeals Handbook” and provides guidance for citizens and counties. It is a more detailed review of the appeals process and be found at this link: https://www.ncdor.gov/taxes-forms/property-tax/property-tax-appeal-proce... This office cannot offer legal advice for your situation, nor can it guarantee an outcome, but the information and suggestions offered herein is based on experience and information from neutral, reliable sources such as The North Carolina Machinery Act, North Carolina Department of Revenue, and the UNC School of Government.
