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Hall appraiser: Fair market value worth another look
Lawmakers agree state should change way taxes are assessed
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The southeastern Hall County property was a wannabe subdivision, with roads, curbs and gutter, underground utilities and streetlights all in place.

But the recession hit, and the developer lost the land in a $1.2 million foreclosure to a bank that later failed. And then, at some point, the land was auctioned off at $55,000.

It’s an example Hall County Chief Tax Appraiser Steve Watson likes to use in making its point about a hardship placed on county assessors.

“Because of (state) Senate Bill 346, we’re required to use sales like this as fair market value, but in this particular case, I just don’t believe that’s fair market value,” he said.

Georgia counties are required to have their appraisals meet the Standard on Assessment-Ratio Studies published by the International Association of Assessing Officers, which is critical “in determining whether appraisals on any one tax digest are at fair market and equitable,” Watson said in a recent report to state lawmakers.

He is pushing for change at the state level. He told the lawmakers during a Dec. 13 breakfast sponsored by the Greater Hall Chamber of Commerce that “these measurements need to be recalibrated ... to take into account the significant change in the real estate market/economy and the change in Georgia state law.

“It would be unfair to continue along this path without adjusting the standards we are judged by.”

Every three years, Hall’s digest undergoes state scrutiny of assessments made on each class of property: residential, commercial, agricultural and industrial.

In 2010, the state found three deficiencies “when they measured (values in) our tax digest against the sales,” Watson said.

By next year, “we’re supposed to have those (issues) corrected in order to not be subject to any sort of fines or penalties,” he said.

The problem is “the market is still in flux,” Watson said.

“It may be a little more stable than what it was a year ago, but it’s still bouncing on the bottom. Some banks still have some inventory they haven’t gotten rid of and the lending institutions aren’t making money available to the degree where it’s improving that side of (the market).”

Hall County, which plans to send out assessment notices in April, has to meet the state’s sales ratio requirements by the time it submits its 2013 digest to the Georgia Department of Revenue in late July, Watson said.

“The digest will get conditionally approved when we take it down there, but I won’t know the results of the sales ratio study until about a year later,” he said.

But he’s hoping for change in the meantime.

“In order to change the regulation, it’s going to take some legislative action or influence,” Watson said.

“The negative impact of holding to these old standards will produce inequitable appraisals and taxes and cause sales chasing,” he told the local delegation.

Sales chasing is when counties “adjust valuations on a particular parcel that is sold to get it closer to what it sold for, but they don’t make similar adjustments to the properties around it,” Watson said.

“What has happened is, because of legislation, where we have to use individual sales, bank sales and auctions and where the standards haven’t changed, you’re put in a situation where sometimes you feel like you’re forced to chase sales.

“We’ve tried to keep from doing that. When we see a neighborhood that needs changing, we just change the entire neighborhood, if we have enough sales.”

The challenge comes when sales in a neighborhood show an especially wide gap.

Watson has a civic club handout that shows sales in one neighborhood varying from $17,600 on a house with a fair market value of $149,033 to $90,000 on a house worth $177,930.

“Now how do I determine how to appraise all the rest of the (subdivision’s homes) for?” he said.

State Rep.-elect Lee Hawkins said he would like to see the legislature, which goes into session Jan. 14, “have a study committee — not one that’s long and lengthy — and invite people like Steve to come up and tell us what their problems are and all.

“I don’t know that we need legislation. Maybe we need to clarify the code or help them work through this,” Hawkins said. “I’d really like to hear their side more than the little piece that I’ve heard to come up with a solution.”

State Rep. Carl Rogers, R-Gainesville, said, “We’re going to look at it. I can’t tell you what we’ll do, if anything.”’

No doubt, he added, “Georgia has been hit extremely hard, bankwise and related to real estate and real estate development and speculation. We’ve still got a little ways to go even though things seem to be on the upswing.”

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