Lake Lanier Homeowners Face Reassessment - Norton's White Paper
Many property owners in Hall County who own Lake Lanier fronting property are incensed about a recent reassessment of property values. This reassessment of 6,558 lakefront homes has sparked a campaign amongst many local residents, as reported in Gainesville Times on June 19, 2014. In this article, it is reported that 90 percent of lakefront properties will see a tax increase.
Some homeowners I have spoken with have assessments that have doubled or even tripled in value. As to the comments regarding boat docks, I take issue with the fact that Hall County's Chief Tax Assessor thinks boat docks are real property. In an email to The Times, Watson wrote:
"Boat docks have always been valued as a part of the real property. That is something that has not changed. There is not a precedent necessarily other than that we have been taxing them for as long as I can remember."
Darla Eden, Tax Commission of Hall County offered this explanation as to why docks are classified as real property in an email to The Times:
“The (Georgia) tax commissioner’s manual defines real property as land and generally anything that is erected, growing or affixed to the land. Tangible personal property is defined as property, other than real, that may be weighed, measured or touched. Essentially, personal property is anything that can be owned that is not real estate. With those definitions, there could be a strong argument to classify docks as real or personal depending on how you define ‘affixed to the land.’”
When I sell a lakefront property, a Personal Property Agreement (Bill of Sale) is a part of the contract because the dock is personal property. It is not part of the real estate.
Frank Norton, Jr., CEO/Chairman at The Norton Agency and renowned researcher/economist has just authored a white paper regarding this issue of reassessment. The white paper follows in its entirety:
HALL COUNTY LAKE PROPERTY TAXES WHITE PAPER – MAY, 2014
In an effort to raise county revenue and provide “equalization” to all Hall County’s tax base, the county commission upon recommendation of Steve Watson, Chief Appraiser, employed a third party consultant Georgia Mass Appraisal Solution & Services (GMASS) to re-evaluate the values of 6,558 Hall County Lake Front properties by the 2014/2015 tax year. While many believe that the county is simply going after “low hanging fruit” for the tax revenue, there was antidotal evidence that isolated properties fronting on Lake Lanier had been over looked for reassessment for as much as 20 years (mostly lake lots and 1995 pre-existing homes).
Because of the perception that only “rich” folks live on Lake Lanier, this initiative might be characterized as a “luxury tax." With only 6,558 parcels out of a county total of 75,000 being reevaluated, calls of “fairness” equality and excessive values by lake property owners affected will simply be heard as cries in the wilderness and fall on deaf ears.
Today, the Hall County lake property hangs in a delicate balance. Since a market peak in 2006, the lake real estate market has been slammed with a triple whammy; historic low water levels, a national real estate market depression and because of the drop in consumer confidence, the evaporation of second home buyers which was once 32% of the market. After the lake level returned to full pool (2012) and the National Economic storm settled down, we have seen improvements in Lake Lanier real estate but only in measured steps. Assessed value is not the same as real market value.
Hall County December 2006 December 2013
Average Lake Home Price $645,000 $475,000
Months of Supply Overall 15 Mo 14.5 Mo
Months of Supply Hall Co 12.8 Mo 14.6 Mo
Months of Supply over $1 Million 36 Mo 64.8 Mo
# Homes Sold Over $1 Million 13 5
Annual Lake Homes Sold 124 117
Source: Data based on Norton Native Intelligence, FMLS, and GA MLS, measuring only lake homes with on property boat docks.
It seems from our initial review that luxury homes, those over $850,000 in tax value have been hit the hardest with the new tax reassessments. Statistically that is the softest market on Lake Lanier (in its entirety) and specifically in Hall County which has 26 homes over 1 Million Dollars (in asking price) or a 64.8 month of supply. Only 5 Hall County homes over One Million Dollars traded hands in 2013 according to First Multiple Listing Source/Georgia MLS.
Our analysis only includes properties with onsite boat docks. An additional five homes over One Million are for sale in Harbour Point which have group or shared boat docks making that a total of 31 Million Dollar lake homes currently for sale in this county.
Norton Native Intelligence™ would call that an over-saturated market.
GMASS was paid around $50.00 per Hall County Lake Lanier property and in no way could have accurately ascertained the real value of Lake Lanier real estate. Norton Professionals and Real Time Buyers know that lake properties are individual; no two tracts are the same. Unique characteristics include permitable dock and lake accessability, quality and size of boat dock, topography / terrain, foliage and tree cover, view, water depth at full pool and water depth when the lake is down 19 feet. Premiums decided by a computer are not always a premium. So it is clearly in a lake owners best interest to seek a second opinion, understand the rationale and County’s support documentation for the County’s new assessment. Compare. And then consider a challenge to determine a REAL 2014 value. We believe actual market comparables (sales closed, not homes listed with potentially speculative pricing) are the most valuable correlation to comparables property value.
The premise that Hall County’s Lake market has rebounded completely from the depressed levels in unfounded and Norton Native Intelligence™ warns of major unintended consequences.
Fight: Expect a fight by “mad as hornet” lake property owners seeking to appeal their May 2014 assessment, this includes calls for commissioner recall, injunctive relief or class action lawsuits. The use of isolated, property sales may be punishing the masses.
Flood: Expect a flood of lake property owners to put their homes or vacant lake lots on the market in light of their taxes going up 50 – 100 or 200% and the added tax burden for a population base that is aging. This will place download pressure on Lake Property prices and will increase the months of supply (inventory) in every category.
Flight: Potential lake buyers are attracted to water not geographic counties surrounding the home or lot. Schools and county taxes in Dawson and Forsyth counties in some cases are cheaper and lake customers will strongly consider those alternative locations, as well as consider properties outside of municipalities like the City of Gainesville where there is an added city tax.
Note: NNI believes that if Hall County is successful in raising the lake tax digest then Forsyth and Dawson County will initiate Lake Front assessments in short order.
We strongly disagree with the Hall County Tax Assessors “equalization” initiative and their contention that it is truly “equal” regardless of isolated lake property under-assessments. We believe that Hall County should have reassessed all county property and not just single out lake property owners.
However it is done, so we encourage and support every lake owners’ right to appeal and engaging in a public hearing/debate on real values and the reality of today’s resale market. Norton has been successful in court action against irrational Hall County tax valuations in the past and while we do not advocate court action, we do advocate speaking up and challenging Hall County officials to support these new valuations in the wake of the current Lake Lanier housing market.
The Georgia legislative has established a clear process for the average taxpaying property owner to challenge any county valuation. First and foremost, you must remember there are critical timeframes to set the appeals in motion.
You have 45 days after the date of your notice to file an appeal (the date is clearly posted at the top of your 2014 tax assessment notice. If you do not file using official appeal forms your right to file an appeal will be lost.
Appeal forms are at the tax office, 2875 Browns Bridge Rd, Gainesville, GA 30504 or can be downloaded at https://etax.dor.ga.gov/ptd/adm/taxguide/appeals.aspx.
At the time of appeal, you must decide on one of the following:
1- Appeal to the County Board of Equalization with appeal to the Superior Court. (Value, uniformity, denial of exemption, taxability).
2- To arbitration without an appeal to the Superior Court (valuation is the only grounds that may be appealed to arbitration)
3- For a parcel of non-homestead property with a FMV in excess of $1 million, to a hearing officer with appeal to the Superior Court.
§ To facilitate your appeal our advice is to select #1, fill out and submit the form to appeal and prepare to go to the County Board of Equalization which is made up of Hall County citizens. After your hearing and their ruling if you do not like their decision, it could be appealed to the Superior Court for review.
§ Go to the appeal personally. We believe citizen to citizen interaction is far more valuable on residential properties. You may wish to have your attorney present but make the appeal personally. You know your property better than anyone and can answer any questions that may arise.
§ Arm yourself with information. Employ one of Norton’s expert Lake Agents to prepare a market evaluation, sales comps and detailed market conditions on your property and the neighborhood surrounding (see below) or engage an outside third party appraisal, $500 - $1,200 to prepare an evaluation of your property to assist you in your equalization presentation. Make copies of the presentation materials (facts and figures) to hand out to the Board of Equalization at your hearing.
§ Your presentation should be cool, calm, collected and professional. Remove the emotion from your presentation and base your statements on facts and data as much as possible.
§ Be careful what you wish for. The appeal process gives Hall County the right to appraise your property inside and out and to do a thorough investigation on a proper valuation. This could cause a review of your finished improvements, re-measure incorrect finished space/square footage and look at the quality of construction.
§ Prepare to chip away at their value, not roll it back to 2013 levels and plan to repeat this process annually so long as values of lake property remain static.
§ Conversely there are several qualified third party tax appeal process firms that can be hired for a percent of the tax savings, but we advocate the personal involvement route.
Norton’s Lake Team can prepare a taxpayer assistance report including a market valid broker price opinion, (BPO) sales comps and market data report. This is not needed at time of appeal but would be used at time of the equalization hearing. Rates for our BPO’s are as follows:
Homes $0 – 750,000 value $350.00
$750,000 & Up $450.00
Hourly rate for attending Equalization Hearing $125.00/hr.
(*Norton agrees to credit the above fees against a sales commission should the property be listed and sold by Norton in the next 36 months.)
This is a complicated but important process and we stand by our clients and our detailed market research. The study is powerful and the tax assessors have gotten this wrong.
For more information, contact your Norton Real Estate Professional.
Frank Norton, Jr.
The Norton Agency
434 Green Street
Gainesville, GA 30501
Disclaimer: The information herein has been deemed reliable. Please consult your personal lawyer or CPA for independent advice concerning personal tax and litigation issues.
Selling North Georgia Since 1988