This information is intended only to provide a brief explanation of the major components of the Real Property Assessment process. Due to space limitations, only selective portions of the process have been included.
Purpose of Property Assessment
The Office of the Commissioner of the Revenue is responsible for administering the ad valorem tax system. An ad valorem tax is a tax levied based on the value of an item. For example: real property and personal property. Assessed values for real estate are set every four years by use of an appraisal system called a general reassessment. The purpose of the general reassessment is to bring assessed values in line with fair market value.
Property Reassessment Every Four Years
Franklin County is required by State Code to reassess real property every four years to bring values back to fair market value (58.1-3252). Failure to reassess real property as required will result in the county's share of State ABC profits being withheld by the State Comptroller (58.1-3259).
Fair Market Value
Real property must be assessed at 100% fair market value. According to the Supreme Court of Virginia, fair market value is defined as "the price which a property will bring when it is offered for sale by one who desires, but is not obligated, to sell, and is bought by one who is under no necessity to have it."
Taxes for Real Property
When you call the police or fire department, play in a park, send your children to public school, check out a book at the library, you are using services paid for by your property taxes. Property taxes are the largest source of local revenue to fund these services that you county on every day.
The Appraisal Process
Franklin County hires an independent firm to conduct the general reassessments. This firm conducts the assessment independent of the Board of Supervisors and the Commissioner of the Revenue.
Assessed Values Changes
There are many reasons for a change in property value; the most obvious reason is that real property usually appreciates in value over time and the purpose of a general reassessment is to measure that change and update the fair market value. The other reason is that some type of change has taken place i.e, adding a garage or deck, or the property has been damaged or destroyed. The appraiser in charge of analyzing data for a general reassessment does not create the value. Value is derived by analyzing all of the transactions in the market place. The assessor's legal responsibility is to determine the fair market value of the property and to ensure uniformity and equity among all properties.
The values for the general reassessment must be approved by the Real Estate Assessors and will be effective January 1 of the reassessment year. Once the assessed value is set, it will not change until the next general reassessment unless additional improvements are made or discovered.
Taxes Affected by Change
Typically, general reassessments are not meant to be a county-wide tax increase. This process aligns values with the market so people pay their fair share of taxes based upon value of ownership. Once the reassessment is complete, the county is required to equalize the tax rate, rendering the reassessment revenue-neutral. It is the responsibility of the Board of Supervisors to determine the budgetary needs of the county and after a public hearing, determine the tax rate necessary to effectively meet those needs.
Rights & Responsibilities
If there is a question about the property value after you receive a notice of reassessment, you may call the number listed on the notice and schedule a time to review the valuation. During general reassessment, there are three steps in the appeals process.
Appeal to the Real Estate Assessors
The first step is to appeal to the Real Estate Assessors employed by the County Board of Supervisors and they are responsible for reviewing questions regarding assessed value. Any request for change must be supported by reasons why assessed value is incorrectly represented, i.e, incorrect information about property or not equalized. Most issues are resolved at this stage.
Appeal to the Board of Equalization
If you are unable to resolve your issue with the Real Estate Assessors, the next step is to appeal to the Board of Equalization (BOE). Franklin County's BOE consists of 5 members who are appointed by the Circuit Court of Franklin County to determine if the assessed value is true to market value and equitable to similar properties. When filing a formal appeal, the burden is on the property owner to show that the assessor has erred in the appraisal by providing evidence that the appraised value does not reflect market value of uniformity. Evidence should consist of sales of comparable properties in the area or information on conditions of the property not previously known to the assessor. If the appeal is based on conditions of which the appraiser was unaware, adequate documentation is required to support the claim.
Appeal to the Circuit Court
If you disagree with the BOE's decision, the next level of appeal is to the Circuit Court of Franklin County. Appeals can also be made directly to the Circuit Court without appealing to the Real Estate Assessors and the BOE.
Neither the Real Estate Assessors nor the BOE is responsible for the amount of tax assessed after values are set. Again, the tax rate is set by the Board of Supervisors as a part of the budget process.