May – it is the month when new (and presumably higher) real estate valuations usually arrive from the County Assessor’s office. If you receive a notice of valuation change or are otherwise wondering what you can do about the assessment of your property, this article is for you.
The Assessment Process
On or before March 20, the County Assessor is required to complete an assessment of the value of all real property subject to taxation. This assessment is multiplied by the tax levy subsequently determined by the County Board of Equalization in order to arrive at the property tax due as of December 31 (payable in equal installments by April 1 and August 1 of the following year).
On or before June 1, the County Assessor must mail notice to the owner of any property if the assessment of that property has changed from the previous year.
All non-exempt real estate (except for agricultural property which is valued at 75% of actual value) is to be assessed at “actual value”, which means the market value in the ordinary course of trade. Actual value may be determined using professionally accepted appraisal methods, including but not limited to, the (a) sales comparison approach, (b) income approach, and (c) cost approach. Actual value is to be the most probable price that a property would bring if exposed to sale in the open market or in an arms-length transaction between two parties who are knowledgeable concerning all of the uses as to which the property is adapted or for which it is capable of being used.
Protest of the County Assessor’s Decision
An owner disagreeing with either a new assessment or an assessment that has carried over from the prior year may file a written protest with the County Board of Equalization on or before June 30. The County Board is charged with fairly and impartially equalizing the value of all parcels of real property in the county so that all real property is assessed uniformly and proportionately. Between June 1 and July 25, the County Board will conduct hearings and decide protests. Counties with a population greater than 100,000 may annually elect to extend the final date for hearings until August 10.
A protest must set forth the owner’s arguments for a change in the assessment. Customarily, the owner will assert that the assessment is in excess of actual value and/or that the property is not equalized with similar properties. Any person may appear on behalf of the owner and give evidence as to why the assessment is erroneous. During the protest hearing, the Board may issue legal process to compel the attendance of witnesses and production of books and records that the Board may believe are relevant. The records of the Assessor’s office are to be available for inspection and consideration by the Board.
On or before August 2 (or August 18 if the county has extended the deadline for hearing protests), the County Clerk will mail written notice of the Board’s decision to the protesting owner.
Protest of County Board’s Decision
An owner that remains dissatisfied with the decision of the Board may file an appeal with the Tax Equalization and Review Commission (“TERC”), which consists of four commissioners appointed by the Governor. The TERC will hold an evidentiary hearing. In order to prevail before the TERC, an owner must present evidence to show that the action of the Board was both (a) incorrect, and (b) unreasonable or arbitrary. The TERC will only consider those issues which the owner raised before the County Board.
At the TERC level, there is a presumption that the valuation proposed by the Assessor is correct, that the Board has faithfully performed its duties in making an assessment, and that the Board acted upon sufficient, competent evidence to justify its action. This presumption disappears when there is competent evidence to the contrary. The reasonableness of the Board’s valuation will then be a question of fact.
The burden is on an owner to demonstrate (a) unreasonableness due to a valuation that is higher than actual value or (b) the failure to equalize. This burden is not met by merely showing a difference of opinion on value, unless it is clearly shown that the value placed upon the property, when compared with valuations placed upon similar property, is grossly excessive and the result of a systematic exercise of intentional will or a failure of plain duty in the assessment process.
If the owner is still dissatisfied with the decision of the TERC, the owner may then appeal to the Nebraska Court of Appeals. The appellate review is limited to errors appearing on the record made before the TERC. Throughout this process, the opportunity for settlement with the County Assessor exists. However, once an appeal has been filed with the TERC, the TERC will need to confirm any settlement.
Owners should keep in mind that each tax year stands on its own and, notwithstanding the result of any protest or appeal, the process will start again for the following year. If possible, it is best to obtain the resolution of any protest on a basis that both the owner and the Assessor may adopt as a reasonable benchmark on a going forward basis. If you are interested in protesting your property tax valuation, we would be happy to help you navigate this process. Keep in mind that your written protest must be filed with the County Board by June 30, so quick action may be necessary.
PRACTICE POINTERS FOR PROTESTING A PROPERTY’S VALUATION
The following tips will help you prepare for a property tax protest:
- Review your last tax statement (or the Assessor website, if available) for the most recent assessed value and allocation between land and improvements.
- Review the Assessor’s property tax card (or the Assessor website, if available) for value calculation/allocation, as well as any factual inaccuracies related to the property.
- Be attentive to any change in value notice.
- Remember that the current year assessment may be protested even though a change in value notice is not received.
- Identify comparable properties, obtain related property tax cards through the Assessor’s office, and be prepared to discuss comparisons of land values and the cost per square foot of improvements.
- Attempt a resolution of any questions or concerns with the Assessor.
- Be prepared to file the protest before June 30, specifying the reasons the assessment is disputed due to valuation and/or equalization.