What Businesses Need to Know About Wake County Property Valuations

What Businesses Need to Know About Wake County Property Valuations

Wednesday, 13 May 2020 16:51

What is your business’s property worth? North Carolina state law requires counties to revalue property every eight years; however, some choose to perform valuation more often. Wake County, for instance, has historically done revaluations every four years. For companies in Wake, you have likely received a letter with your new valuation and found it is much higher than you expected. Therefore, your business property tax liability has increased in a time when you are likely doing everything you can to cut costs. 

 

The News and Observer reported, "On average, homes in Wake County increased 20% in value from four years ago, and commercial properties increased 33%." Hotels and apartment complexes saw the most significant increases; 48% and 45% respectively, per the N&O. Some towns and cities saw commercial property values rise more than others, including:

  • Apex: Commercial Property Change 31%
  • Holly Springs: Commercial Property Change 31%
  • Morrisville: Holly Springs: Commercial Property Change 31%
  • Fuquay-Varina: Commercial Property Change 32%
  • Garner: Commercial Property Change 32%
  • Raleigh: Holly Springs: Commercial Property Change 36%
  • Knightdale: Holly Springs: Commercial Property Change 36%
  • Wendell: Holly Springs: Commercial Property Change 40%

With continued explosive growth throughout the Triangle area, these valuations reflect the continued demand for property in every corner of Wake County. The question for business owners and accountants, however, is whether or not you agree with the new valuation and its impact on your tax liability. In this article, we want to help you understand the process and what your options are if you believe your property has been unfairly valued. 

How The County Determines Your Property Value

There is entirely too much commercial property in Wake County for officials to inspect and appraise on-site, so they implement mass appraisal techniques to determine your commercial property value. Mass appraisal software help counties see and evaluate each building on your campus based on a number of factors, including:

  • Number of structures
  • Size of the parcel 
  • Each building’s purpose(s)
  • External additions
  • Quality of construction materials 
  • Signage

Of course, without physically seeing inside each building, there is room for error in the models. Small changes across the entirety of your properties can potentially add significantly to the overall valuation and your company’s real estate property tax bills. 

What They Could Get Wrong

With mass appraisal techniques, it is quite possible to miss key details that can significantly impact your tax liability, and ultimately, your bottom line. One of the common valuation mistakes is improperly categorizing property and buildings. Active retail space is valued distinctly from office and warehouse space. 

For instance, we worked with a bank client in a large building, with only the first floor dedicated to retail banking. A county valued the property as if the entire multi-story building was retail banking space. We were able to help this client through the appeals process and ultimately helped them significantly reduce their real estate tax burden.

Should You Appeal?

If you believe your property has been valued too high, there is an appeal process. However, you will need to make sure you have your case prepared and organized, so you can ensure a fair revaluation. 

Most CPAs focus their attention on income tax, but with the right eyes, most companies can reduce their property tax burdens considerably. Our expertise and experience in this mostly misunderstood area of taxation is unique. We excel at finding tax savings opportunities for our clients. We are confident we can help, so we will assess and review your property valuation for free. If we cannot save you money, it is no cost to you. If you want to dive in and see if there are savings available, we can find it and help you with the next steps. Contact Lyall CPA today.