Commissioner of the Revenue

Real Estate Tax Assessments Frequently Asked Questions

Overview

1. Who actually performs the task of assessments? What are the qualifications of these assessors?
An appraisal firm is contracted to do the general reassessment in the City. The firm that completed the current reassessment is Pearson Appraisal Services. Their staff members are experienced appraisers. The person(s) placing the actual values on the parcels are certified and licensed in the state of Virginia.

2. How are the assessments on each parcel determined?
The contracted appraisal firm assesses every parcel at its current fair market value. The appraisal firm performs a market analysis and sales study to determine what the actual fair market of real estate is at the time of assessment. The cost of new construction is also considered. The firm inspects each parcel of property, reviewing the existing property card and making appropriate corrections and adjustments as necessary. The firm has access to the computer data maintained by the Commissioner of the Revenue. Rate tables are set up in the computer system and current data is entered to calculate land and improvement values. After all data is entered, values are reviewed by the assessor and his staff. Reassessment notices are then mailed to each property owner informing the owner of the reassessed values.

3. Why must real estate be taxed at fair market value?
The Virginia Code requires that real estate be assessed at fair market value.

4. How do I know my assessment reflects fair market value?
Assessing property is not an exact science and typically is a mass estimating process, not individual property appraisals. Assessments are considered to be a good estimation of fair market value if they are reasonably close to the recent sale prices* within any given neighborhood. The acceptability of values is measured by the Assessment-to-Sales Ratio (ASR). The ASR is derived by dividing the assessed value by the selling price.

It is important to note that the ASR is measured at the median neighborhood level. Ratios for individual properties may be higher or lower depending on the date of the sale and the pace at which the market is changing. The ASR is calculated based on the neighborhood median of all sales* that occur throughout the year preceding the assessment. If there are no sales* within a particular neighborhood, sales* in a comparable neighborhood are used.

The Virginia Department of Taxation annually conducts a sales ratio study in the City to determine the relationship between assessed value of real estate in the City and what property has actually sold for during the past year.

*For arm’s length transactions.  Typically, foreclosures, distress sales and related-party transactions are disregarded.

5. What is the difference between sales price, appraisals, and general reassessments?
Sales price is the actual price a buyer pays for a particular property. An appraisal is a detailed single property valuation, and may be obtained any time throughout the year. Appraisals can have a variety of purposes, e.g. mortgage loan, sale, home equity loan, and estate valuations. A general reassessment is a mass appraisal of property as of July 1 for tax purposes. These assessments are based on large numbers of sales that are analyzed to determine values for large groups of similar properties.

6. Is there a law that prevents assessments from changing more than a certain amount?
The Code of Virginia requires real estate assessments to represent fair market value. There is no provision to limit the amount of change from year to year.

7. How can a property be assessed for more than its purchase price?
Real estate may be assessed for more than the sales price because the assessment reflects “fair market value.” Fair market value is not necessarily the price paid for a piece of real estate, but rather, what it is worth on the real estate market.

8. What happens if the City does not assess real property at or near fair market value?
A number of state funding sources for the City are tied to the accuracy of property assessments. The State Tax Department makes yearly comparisons of assessments to actual sales. If assessments fall too far below market value, state funding can be reduced or even withheld.

9. What can I do if I disagree with my assessment?
When the reassessment of all parcels in the City has been completed, the assessors hold hearings to review properties on which there is disagreement. If you are not satisfied with the determination of the assessors, you may appeal to the Board of Equalization. You may also appeal to the Board of Equalization even if an appeal has not been made to the assessors. If you are still not satisfied with the determination of the Board of Equalization, the only remaining option is to petition the Circuit Court in accordance with Section 58.1-3984 of the Code of Virginia. In all cases it is the responsibility of the taxpayer to provide documentation as to why their assessment should be changed. This may include:

10. What is the equalized rate?
According to state law, the equalized rate consists of a tax rate that will not exceed 101% of the prior year’s total tax levy, excluding new construction.

11. If the information on the City’s website and the information on my assessment sheet do not match, what do I do?
You may call the Commissioner of the Revenue’s Office at 540-372-1207 to report the discrepancy and they will resolve the problem.

Timeline of process:

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