1. 2009 Reappraisal PADCTN.COM George L Rooker Jr. Property Assessor
© Property Assessor, Davidson County, TN. All rights reserved.

2. Your house as seen by yourself…

3. Your house as seen by your buyer…

4. Your house as seen by your lender…

5. Your house as seen by your appraiser …

6. Your house as seen by your assessor…

7. THE TRUTH ABOUT ASSESSORS!#
THE TRUTH
ABOUT
ASSESSORS!
The Office of Federal Housing Enterprise Oversight issues each quarter a Housing Price Index for various jurisdictions, including the Nashville MSA and the State of Tennessee. This chart tracks the changes in values from 1/1/2005 – date of the last reappraisal through 12/31/2008.
The HPI is based on the thousands of sales prices of single family dwellings mortgaged more than once through Freddie Mac or Fannie May and has been considered one of the most accurate indexes available because it tracks the changes in values of the same houses over time.
You will note that it shows significant gains in value during the first three years of the appraisal cycle. For the Nashville MSA, 7.9% for 2005 and 10.2% in 2006, 5.5% in 2007.
The first half of 2008 saw very small gains totaling 1.4%. The third quarter experienced a drop from the high of 25% down to 24%. And the 4th Quarter saw the slide accelerate to ____.
When you hear people talk about falling prices, they often fail to consider that while the market has fallen in the last half of 2008, it had risen dramatically in the preceding three years.
CLICK

8. #
WE JUST
SPLIT
THE CHECK!
The Office of Federal Housing Enterprise Oversight issues each quarter a Housing Price Index for various jurisdictions, including the Nashville MSA and the State of Tennessee. This chart tracks the changes in values from 1/1/2005 – date of the last reappraisal through 12/31/2008.
The HPI is based on the thousands of sales prices of single family dwellings mortgaged more than once through Freddie Mac or Fannie May and has been considered one of the most accurate indexes available because it tracks the changes in values of the same houses over time.
You will note that it shows significant gains in value during the first three years of the appraisal cycle. For the Nashville MSA, 7.9% for 2005 and 10.2% in 2006, 5.5% in 2007.
The first half of 2008 saw very small gains totaling 1.4%. The third quarter experienced a drop from the high of 25% down to 24%. And the 4th Quarter saw the slide accelerate to ____.
When you hear people talk about falling prices, they often fail to consider that while the market has fallen in the last half of 2008, it had risen dramatically in the preceding three years.
CLICK

9. We just want to be fair! Steve Chuck Larry#
We don’t set the menu .. We don’t set the prices.
We just want to be fair!
Steve
Chuck
Larry
GUEST CHECK
Total $60
Lobster $30
Steak $20
Chicken $10

10. We just want to be fair! Steve Chuck Larry#
We don’t set the menu .. We don’t set the prices.
We just want to be fair!
Steve
Chuck
Larry
GUEST CHECK
Lobster $30
Steak $20
Chicken $10
Total $60

11. Why
Why reappraise?
Since our last reappraisal in 2005, market values have changed, but not uniformly across the county. Reappraisal restores equity in values. Without it, property owners in a “cold” or depressed market area pay more than their fair share of the tax burden.
CLICK when ready

12. How do we appraise? We use accepted appraisal methodology.#
How do we appraise?
We use accepted appraisal methodology.
We analyze sales data in our market;
We use the cost, market and income approaches to value;
We comply with USPAP standards and State BOE guidelines;
We establish market value
as of 1/1/2009.
We analyze sales data that is verified as an arms-length transaction between willing seller and willing buyer
We use cost, market value and income approaches in our analysis ..
We establish values and trends under the Uniform Standards of Professional Appraisal Practice – Standard 6 which applies to mass appraisals for purposes of taxation and under the guidelines of the State Board of Equalization.
Our appraisals must reflect the market values of property on January first, 2009 – the date of appraisal.

13. Why reappraise now in an unstable market?
While we would prefer to complete the program in a stable market, we are obligated under a four-year plan approved by the State Board of Equalization to reappraise this year.
We invested the first three years inspecting all 230,000 properties in the county, and we now are completing the final year of value analysis.
CLICK when ready

14. Tennessee Property Tax System
State Constitution establishes an ad valorem tax system.
Assessment function separate from Taxation function.
Assessment function assigned to Property Assessors.
Taxation function assigned to county/city legislative bodies.
State Comptroller’s Division of Property Assessments monitors assessment and State Board of Equalization hears appeals, sets rules, approves Certified Tax Rate.
Assessor identifies, lists, appraises, classifies all taxable property to achieve equity in values and prepares annual assessment roll.
After Council adopts a tax rate, the Trustee applies it to the assessment roll and mails the tax bills for collection.
CLICK to next slide after “mails tax bills for collection.”
County/City Mayor presents annual budget to county legislative body, which sets tax rate to apply to the assessment roll.
In 1993, the State Board approved a four-year cycle for reappraisal for the major metropolitan counties.
County Trustee takes the assessment roll and applies the tax rate to calculate taxes due; mails tax bills and collects the taxes.

15. How we consider market trends.#
How we consider market trends.
Since the reappraisal is being completed with the market in decline, we carefully considered the effect of these trends on our appraisals.
We analyzed sales ratio studies, median sales price reports, capital availability, sales volumes, market inventories, occupancy rates, unemployment rates, and other general economic data.
With approval of the State, we then modified our approach
to give added weight to the most recent sales, allowing us
to accurately reflect the value of property as of 1/1/09.
This reappraisal year is unique in my 30 years of experience in assessments. It comes at a time when

16. 2005 through 2008: almost ‘A Tale of Two Cities’#
2005 through 2008: almost ‘A Tale of Two Cities’
“It was the best of times;
it was the worst of times.”
After the 2005 reappraisal, Davidson County enjoyed two and a half years of a brisk real estate boom with values peaking in mid-2007.
04/11/2006
4/21/2005
Appraisals were not updated during the boom period unless a change occurred by addition, damage or in type of use.

17. 2005 through 2008: almost ‘A Tale of Two Cities’#
2005 through 2008: almost ‘A Tale of Two Cities’
“It was the best of times;
it was the worst of times.”
Then, the next year and a half, fewer sales occurred with only modest gains in values.
And during the
last six months
of 2008, prices
began to fall.

18. Greater Nashville Association of Realtors
Median sales
$172,900 – 04/06
$154,000 – 01/05
$196,000 – 06/07
$165,000 – 01/09
Greater Nashville Association of Realtors
$160,000 – 02/09

19. Sales index
$181,650 – 6/07
$177,400 – 1/09
$168,750 – 12/05
$154,000 – median sales price at 1/1/05
Green Base Line for appraisals, which did not change from 1/1/2005 through 12/31/2008.

20. Average Increase in Value
Sales index
$181,650– 6/07
$168,750 – 12/05
$177,400 – 1/09
Average Increase in Value
$154,000 – median sales price at 1/1/05
Green Base Line for appraisals, which did not change from 1/1/2005 through 12/31/2008.

21. Heat map
CAVEAT:
The percentages shown in each district represent an average value gain, less new construction, for all classifications, based
on the most current
analysis.
Not all districts are
finalized, but we
do not foresee
major changes
from these figures.
A property may be
above or below the
average for the
district, based on
neighborhood
market
conditions.
DARKEST RED:
HIGHEST GAIN
DARKEST BLUE:
LOWEST GAIN

22. Reappraisal not designed to raise revenue.
Tennessee’s Certified Tax Rate law is intended to prevent a revenue windfall for the county after a mass reappraisal. It requires the tax rate be adjusted down to produce the same amount of revenue as the previous year.
CLICK when ready

23. Certified Tax Rate Effect5
Certified Tax Rate Effect
At the CTR, taxpayers in hot market areas pay more, and those in distressed areas pay less due to the effects of equalization. Taxpayers in between, pay about the same as the prior year. The CTR lowers the tax burden for property owners whose values fall below the countywide average increase in values.
CLICK when ready

24. Effects of 2005 Reappraisal - Tax Rate Changes
Three Houses –Each appraised at $155,000 from 2001 thru 2004.
2004 Tax Rate:
$4.58
2005 CTR:
$4.02
2005 Final Rate:
$4.69
TAX BILL
$1,775
TAX BILL
$1,618
’04 - $157
TAX BILL
$1,888
$113
CTR + $270
$161,000 = +4%
TAX BILL
$1,775
TAX BILL
$1,775 ’
TAX BILL
$2,072
$297
CTR + $297
$176,700 = +14%
To really understand the Certified Tax Rate, let’s look at the effect of the 2005 rates, compared with the previous year.
The 2004 combined GSD-USD tax rate was $4.58, the 2005 Certified Tax Rate was $4.02 and the final rate adopted by the 2001 Council was $ CLICK
We’ll take three houses from different neighborhoods – all appraised at $150,000 from 2001 through The green house was in a neighborhood where the values only went up 6% between the 2001 and 2005 reappraisals so his appraisal climbed from $150,000 to $159,000. CLICK
The red house was in a warmer real estate market and went up 14% -- about the median increase countywide -- to an appraisal of $170,850 during those four years. CLICK
The blue house was in a hot market .. similar to what happened in East Nashville in recent years. Its appraisal went up 20% to $182,850. Now let’s look at their tax bills …
CLICK
All three properties had a tax bill of $1,718 in The green house would have paid $120 less under the Certified Tax Rate in 2005 because its values went up less than the median increase countywide. But after the final tax rate was passed by Council, the green house taxes went up $266 over the Certified Tax Rate and $147 more than the previous year.
The red house was right on the median increase .. 14% so that owner would pay the same $1,718 under the Certified Tax Rate as paid the previous year. But the final Council rate raised the taxes on the red house $286 over both the 2004 taxes and the CTR.
Now the blue house would have seen a $120 tax increase even if the Certified Tax Rate had stayed in effect, but the Council added another $326 to its tax bill when it raised the Certified Tax Rate by 17%.
TAX BILL
$1,775
TAX BILL
$1,932
’04 + $157
TAX BILL
$2,254
$479
CTR + $322
$192,200 = +24%
Total Revenue: $ $ $6,214
All figures rounded.

25. Certified Tax Rate History#
Certified Tax Rate History
After reappraisals in 1993, 1997, 2001
and 2005, the final rate was raised above
the CTR, and all but the most distressed properties paid higher taxes. ?
This chart shows the tax rates adopted by the Council after the reappraisals in 1993, 1997, 2001 and 2005, along with the prior year’s tax rate, and with a projection of the 2009 CTR, based on current figures.
As you see, the 1992 combined GSD-USD tax rate was $ The Certified Tax Rate in 1993 lowered that to $3.87 but Council adopted a tax rate of $4.50 – 63 cents or 16% higher.
In 1997, Council raised the $3.58 certified tax rate by 54 cents or 15%. In 2001, the certified tax rate of $3.67 was raised 91 cents or 25%. In 2005, the certified tax rate of $4.02 was hiked by 67 cents to $ % higher.
Please note that the 2005 tax rate has stayed in effect, unchanged for four years. Although the years 2005 and 2006 were high growth years with housing values increasing on average in double digits each year, and while 2007 was also a year of modest gain in value – taxpayers still paid on the basis of their 2005 appraisals. Even new construction added during those years were appraised using the same appraisal formulae used for 2005 assessments, so all property would be treated alike.
We have not quite completed final calculations for 2009, but we project that the certified tax rate will fall in the range of $4.10 to $4.20 – so we used $4.15 here. Theoretically, under the CTR, one-third of the property owners will pay less tax, a third would pay about the same, and a third will pay more – basically raising the same amount of revenue as the previous year, except for new construction. CLICK

26. #

27. #
27 jurisdictions now have combined city-county tax rates higher than Davidson County’s combined rate.

28. MAILING OF 2009 NOTICES WILL OCCUR IN APRIL
Heat map 2
MAILING OF 2009 NOTICES WILL OCCUR IN APRIL
IN THE ORDER SHOWN. 3 1

29. #
PADCTN.COM

30. Opening Screen for WebPro
Fully animated
COMMENT: This is the search screen for WebPro. You can search for records by Street Name, which gives you all properties on a street, or by Street Number, for a specific property.
Also, you can search by Owner’s Last Name.
Or by the Parcel ID Number as printed on the Assessment Notice.
We want to maintain a high degree of transparency in the appraisal process because it is important to the people whose property we appraise. We have no motivation to do anything other than the best job possible to get all the values right and equitable.
Click to
NEXT: WebPro Summary Screen
Opening Screen for WebPro

31. Record Card – Check our records on your property and let us know of any corrections needed.
Fully animated
COMMENT: This is the search screen for WebPro. You can search for records by Street Name, which gives you all properties on a street, or by Street Number, for a specific property.
Also, you can search by Owner’s Last Name.
Or by the Parcel ID Number as printed on the Assessment Notice.
We want to maintain a high degree of transparency in the appraisal process because it is important to the people whose property we appraise. We have no motivation to do anything other than the best job possible to get all the values right and equitable.
Click to
NEXT: WebPro Summary Screen

32. Methods for Review or Appeal
INFORMAL REVIEWS
Best Method: File a request online.
Talk to our phone center staffed by appraisers.
Call to set an office appointment with an appraiser.
Requests for informal review accepted until May 15th.
FORMAL APPEALS
Deadline to file appeal: June 19th.
Hearing officers review, recommend action to MBOE.
Further step: an appeal to the State Board of Equalization.

33. Programs for seniors and disabled homeowners.
Tax Freeze Program
Homeowners age 65 or older can “freeze” the property tax on a principal residence at a base year rate if their total income is less than $36,200 for the 2009 tax year.
Tax Relief Program
Homeowners age 65 or older or totally disabled homeowners may qualify for tax rebate on $25,000 of the value of a principal residence if their combined income is under $24,790.
Disabled veteran homeowners, or their widows, may qualify for rebate on up to $175,000 value of their principal residence.
Tax Deferral Program
Homeowners age 65 or older or totally disabled homeowners or a family group with more than one such person residing permanently in the principal residence may qualify for tax deferral. Income limit is $25,000 a year.

34. VISIT PADCTN.COM FOR MORE INFORMATION
recap
SUMMARY
Reappraisal provides fairness in the property tax system by updating values to restore equity after 4 years of market changes.
The Certified Tax Rate Law is intended to keep governments from getting a revenue windfall as a result of a mass reappraisal.
We use universally accepted appraisal methodology and we consider current market trends and conditions.
Appraisals must reflect values as of January 1, 2009.
Please visit our website to verify the data on your property; if you disagree with your appraisal, please file online for a review.
VISIT PADCTN.COM FOR MORE INFORMATION

35. Because we value Davidson County!#
Our goal is to be:
Because we value Davidson County!
“Fair & Equitable” is a copyrighted publication of the International Association of Assessing Officers.

36. 2009 Reappraisal PADCTN.COM George L Rooker Jr. Property Assessor
© Property Assessor, Davidson County, TN. All rights reserved.