During the month of October, county assessors from across the state met with TNAAO, the State Division of Property Assessments, and CTAS to discuss more frequent reappraisals and some of the options that have now become available. Over the last two years, the reappraisal statute (T.C.A § 67-5-1601) was expanded to allow more options in certain circumstances. Here are some of those new options:
- Allows the assessor to submit a reappraisal plan to the State Board of Equalization for consideration that is less than the traditional 4-, 5-, or 6-year options if it has the same effect.
- Allows decoupling of the visual review process if it does not exceed 4 years. In cases where a 2-, 3-, or 4- reappraisal option is made, the assessor would still have 4 years to complete the visual review of all the parcels in the county.
- If the reappraisal plan is 4 years or less, allows value updating with or without indexing. Indexing is accomplished by extracting a factor from properties that have sold and applying that factor to all the properties within that specific market to bring their value back in line with current market value.
Much of what has historically taken place does not change with the newly expanded options. For example, the assessor is still responsible for determining the reappraisal cycle and preparing the reappraisal plan for submission to the county mayor and the county legislative body for review. A current reappraisal plan can be modified mid-cycle in some cases and last, but not least, all value updating whether through a countywide reappraisal or indexing will trigger a new certified tax rate calculation.
In many cases, the expanded reappraisal options provide a remedy that will prevent an equalization ratio from being applied to personal property and public utility assessments. For those that move from a 6- or 5-year reappraisal cycle to a 4- or 3-year reappraisal cycle it will automatically remove at least one equalization ratio. Those that include indexing in their plan can remove all equalization ratios. This very action will eliminate the reduction of personal property and public utility assessments due to equalization, increase property tax revenues, and protect Tax Relief payments received by elderly and veteran homeowners.
Communication between the assessor, mayor, and county legislative body is vitally important when considering more frequent reappraisals and indexing. Pursuing the expanded reappraisal options may require an additional financial investment in the assessor’s office. This should not be a deterrent because in most, if not all cases, the investment will be substantially less than the revenue impact created by equalization ratios.
For more information on reappraisal options contact your CTAS Property Assessment Consultant.