Property taxes can get people worked up, and a big source of anxiety is the annual setting of the property’s valuation.
Now homeowners often take that anxiety to social media, where people’s complaints can spread misinformation, twisting a process that underpins the entire property tax system in Nebraska.
So The World-Herald interviewed Sarpy County Assessor Dan Pittman and Douglas County Assessor/Register of Deeds Diane Battiato about the valuation process, people’s complaints and the misconceptions about their work.
The process is set up like this:
Assessors are independent evaluators tasked with putting a tax value on all properties in a county — homes, businesses, land and all. By law, their job is to set a home’s tax value in a range that reflects what that house is actually worth on the real estate market.
To do that, they visit neighborhoods year-round, stopping at individual homes and sometimes knocking on doors. They check building records, analyze real estate data and even take calls from nosy neighbors.
But after the assessors establish those values, they are out of the taxing process. They don’t set property tax rates for local governments that, combined, are half the tax equation of what you’ll end up paying.
The World-Herald interviewed Pittman and Battiato separately to get their take. Here is some of what they said. (Responses have been edited for space.)
How often does the assessor do a physical assessment of my home?
Battiato: By statute, larger counties are bound to do an inspection of their county in a six-year cycle. But that’s not really how it works. The actual way that is done is based on sales. If there are enough sales to warrant this area — say Benson because it’s hot right now — we have to look at that area.
Pittman: Every day, the Assessor’s Office is out in the field collecting data on properties. We’re out there constantly, daily, with six-year inspections.
Do you factor in home improvements from building permits?
Battiato: Building permits are very important. That’s one of the avenues we have when we haven’t seen the inside of a property. If the permit is adding a bathroom, adding an addition, we would take a look. It could be something, not always, that could affect your value.
What are those inspection notes you leave?
Pittman: If we’re on your property, we leave a calling card. Right away, people want to know who that would have been. We don’t get a high percentage of people calling back.
Battiato: When they’re not home, we always leave a door hanger. There can be changes that may or may not affect your value. It can be a decrease in value. Some people would say, we’re not going to let you in because you’re going to increase my value. That’s not always that case. We want to have the most up-to-date information on your property.
Why are finished basements so important?
Pittman: The area where I get the most suggestions from people is recording a basement finish. I get emails, letters, phone calls that so and so has a finished basement — I know they do — but they don’t get valued for it, when I was honest about my finished basement. There are three ways we’ll find out if a home has a finished basement: building permits, the Realtors’ Multiple Listing Service and our office’s six-year review of a property. We can’t just go in someone’s home. I’ve gone as far as to write somebody.
Battiato: If it’s finished, it’s added to the livable space of a home. We’ve had property owners bring up a neighbor’s property. Neighbors are good sources of information.
Do you consider whether a home needs improvements?
Pittman: We certainly do. If there’s a dated kitchen, that’s going to affect what someone would pay for that house. Also deterioration — if you get up close and see a giant crack. Or all the window sills are rotted out. Or a sagging foundation. We ask you to get an estimate of the cost to cure. We will reduce that value by that cost.
Battiato: Definitely. We invite property owners in those types of situations to come talk to us. If you don’t feel comfortable for us to come out, come into our office and bring pictures.
Does the style of home matter?
Pittman: That’s pretty important. When we look at sales of homes, we analyze architectural styles, and people will pay a different amount for different styles of homes. Ranches are the top of the heap.
Battiato: Style is a major component. The cost of construction on different styles varies greatly, ranches being the most expensive to build.
How much of a valuation increase is related to home sales in an area?
Battiato: All revaluations are based on actual completed sales — sold properties in an arms-length transaction.
Pittman: Sales are king.
How wide of an area does the assessor consider for sales?
Pittman: Usually by subdivision, but sometimes subdivisions are combined because we needed sales to paint a picture of the market.
Battiato: Historically, we had six market areas in Douglas County. Now we have 17 market areas. We designed the areas based on high school attendance areas. It’s worked great for us this year.
What if my valuation is higher than an appraisal on my home?
Pittman: We love to see those. We will definitely consider that appraisal. But we will not just take that value on that appraisal.
Will it help me to get an appraisal?
Battiato: They cost around $400 to $500. We would take that into consideration.
Pittman: I’d never tell you not to. I don’t know that it’s necessary to pay for the cost of an appraisal when there’s so much data available publicly.
Did my valuation go up because a local government needed more revenue?
Pittman: I can tell you that in 20 years as county assessor, I’ve never been approached by a taxing entity hoping assessments were going up. Valuations are not based upon a taxing entity’s need for funding. At the end of the day, the values have to prove out against the market.
Battiato: Definitely no.
What about the passage of a school bond issue?
Pittman: No, it’s based what you could sell your home for, not anybody’s need for funding.
Battiato: We don’t even have an idea what’s going on with the schools. They’re not at all connected.
What about annexation?
Pittman: The assessor makes no adjustment for annexation. We will often see later the effects of annexation if the demand for homes outside the city is greater than in the city limits. You see that down the road.
Battiato: Whether it’s in the city limits or in the county, we’re not looking at those individual situations.