NEW HANOVER COUNTY — The New Hanover County real estate market has experienced “unprecedented” growth since its last property valuation, as announced in a county staff presentation to commissioners two weeks before property notifications are mailed.
READ MORE: NHC tax rate could bring in upwards of $127M more next year, per early budget numbers
According to county tax administrator, Allison Snell, residential values increased 67.23% on average and commercial values increased 66.9%, bringing the overall rise to 67.15% on average since 2021. The median change for both sectors was a little over 59%.
The median increase is different from the average, reflecting the area’s price point where half of the homes sell for more and half sell for less.
The county’s beach towns experienced the highest average increase, Snell reported: Wrightsville Beach at 77% and Kure Beach and Carolina Beach both at 73%. The City of Wilmington saw a 63% increase on average while the county’s unincorporated region was at 67%.
“There was a lot of people looking to move to the beach, and they were willing to pay for it,” she said.
The county’s average home price is now valued at $581,187 and the median is $411,000. Thus, the average home value’s bill would be $2,615 this year based on the current tax rate of 45 cents per $100.
“We’ve seen somewhere in the neighborhood, I believe, of 20 to 23 percent inflation since 2021 and yet we still tax everything based on 2021 values,” Commissioner Rob Zapple said at the meeting. “I know that’s kind of hard to wrap your head around, but the truth is we’re really lucky to be living in a growing community.”
The revaluation process starts with a market analysis to determine trends and market costs. This informs a schedule of values, which the tax department must adhere to when assigning values. The analysis evaluates income, vacancy rates, cap rates, building cost and sales data. The state requires municipalities to undergo this process every eight years, but New Hanover County does its revaluation every four. Commissioner Dane Scalise asked Snell to explain why.
“When you see such drastic changes in the market, it can be a big shock to many people,” Snell said. “Unfortunately, even on a four year cycle, we’re going to see that with this revaluation, and that’s what the market has done, unfortunately. But the hope is that doing it on a short cycle will alleviate some of that sticker shock.”
Last month, county staff prefaced Thursday’s numbers, telling commissioners keeping the tax rate the same could bring in upward of an additional $127.29 million. This was on the lower end, if the property valuation came out to a 55% increase. At 67%, revenue would be closer to $150 million.
The county also presented several tax rate scenarios for next fiscal year, beginning July 1. The inflation-adjusted rate calculated for a 65% increase was $0.35, ten cents lower than the current rate. The county has estimated an additional $68 million in revenue is needed to keep pace with inflation while funding the same budget lines.
On top of the inflationary adjustment, the county estimated $69 million in additional revenue was needed for enhancements or added costs to the general fund, such as added needs from New Hanover County Schools or moving over items from Covid-19 relief funding, which has now expired.
Adjusting the budget for inflation and these enhancements — which were more broad strokes when presented because of how early on the county is in the budget process — would bring the additional revenue needed to $130 million.
The commissioners have not yet indicated their plans to adjust the county’s tax rate. Bills will not be distributed to property owners until that decision is made and goes into effect next fiscal year, beginning July 1.
Property owners should receive notifications from the county by the end of the month regarding information about their property’s newly assessed value. The public can also see this information now online through the county’s website.
Any disputes owners have can be settled through the appeal process. The review board will adjourn on May 22, at which point no more appeals will be accepted, though the board will continue to hear cases throughout the year.
“Every property owner has the right to appeal their property value, and we encourage them to do so if they have any inclination or reason to believe that the value established for their property is incorrect or there’s something that we have not considered,” Snell said.
During the last revaluation in 2021, around 5,000 people appealed.
Appeals must be submitted to the tax department in writing and provide data or evidence supporting the property owner’s dispute of the revaluation. Snell also explained the county has launched a comparable search portal through its website allowing people to enter their property and see other properties that have sold at the same price. This data can be used in the appeal process.
There are also exclusions some community members can take advantage of to alleviate some costs from the revaluation.
Elderly, meaning 65 or older, or permanently disabled residents with income below 37,500 can have their bill reduced by $25,000 or 50% of the assessed value of the home, whichever is greater.
Veterans with a 100% total disconnected service-related disability can apply to receive a $45,000 reduction in their assessed property value. Veterans must have been honorably discharged and their spouses may also apply if the veteran is deceased.
There is also what’s called a circuit breaker program for the elderly with income up to $37,900 to have their tax bill reduced to 4% of their income. If they make more than $37,900 but less than $56,850 their tax bill will be limited to 5% of their income.
More information on these programs can be found on the county’s revaluation website.
Snell added that county residents can break down their tax bill into four increments;, however, the department accepts payments all year long. She reported some of the population submits payments on a weekly or biweekly basis, which then show up as credits on the official tax bill.
Scalise encouraged applicable property owners to utilize all resources available in the revaluation process, but stated property value increases are an “inevitability of life.”
“No one wants to consider tax value going up in property, but it is something that happens over time, and we’re trying to do it as thoroughly and as transparently as we can,” he said.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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