Annual real estate assessment notices for Albemarle county residents will be mailed out on January 14, and most residents are in for an unpleasant surprise. County Assessor Peter Lynch announced at the December 15 Board of Supervisors meeting that the overall increase in the county’s property tax basis for 2022 is 8.32%, a huge jump from the 1.4% increase in 2021 and the largest hike in the last 14 years. County assessments are based on the current estimated fair market values of residential and commercial properties, and recent spikes in inflation and a hot housing market are driving the higher valuations.
Lynch explained that Albemarle County reassesses property every year using a “mass appraisal” model that takes into account neighborhood and community-wide trends in housing prices via sales. “We reassess all properties every year using the updated model based on the information we have on file for each property,” he said. In addition, his office reviews about 20% of all properties each year (so that all are reviewed within every five years), focusing especially on all properties sold and those with a building permit.
The county-wide 8.32% average means that the majority of properties (about 24,000) will see a 5-to-15% increase in valuation, while over 5,000 parcels will go up by 15% or more. Lynch provided an example for the median home value in the county: a property worth $386,900 whose home value increased by 8.68% (the average change for that value range) would pay $263.89 more in taxes, assuming that the tax rate itself remains unchanged. As another example, a $150,000 property whose value increased by 8.5% would owe $100.77 more.
Within Albemarle county, the Scottsville District saw the biggest increase in assessed values at 11.14%, while White Hall District values went up 7.74%. In terms of housing types, apartment complexes were up 11.8% and single-family residential units increased by 9.6%, but commercial structure values stayed level with last year. Within the residential category, properties worth between $1 million and $2 million saw the largest increase at 11%. “There was a record number of real estate sales in 2021— 2,311 parcels—which might go as high as 2,500 by year’s end,” said Lynch.
Albemarle is not alone in the real estate valuation surge. Nearby Nelson County operates on a four-year reassessment cycle (as opposed to Albemarle’s annual cycle) and brings in an outside firm to make their assessment determinations. Those notices went out in November and many Nelson residents were shocked to find their home values had jumped 30% or more. Some are hoping that the Nelson Board of Supervisors will “equalize” the hit by lowering real estate tax rates to balance the surge in values, while others plan to appeal their assessment.
Land Use Taxation
Lynch also discussed the revalidation process for parcels in the county’s “land use” program, which are taxed on their lower “use value” rather than market value because they are being used for agricultural, horticultural, forestal, or qualified open space purposes. “It’s not an exemption,” he said, “it’s a deferral of taxes for a period while the land actively qualifies for the program, because if the land changes to a non-qualified use, then the owner will have to pay rollback taxes.” Rollback taxes are the difference between market value and use value taxation. They must be paid by the landowner for the current year plus the previous five years if the property loses its land use status (by being developed, for example).
“About 4,000 parcels qualify for land use taxation currently,” said Lynch, “which represent 210,000 acres [of Albemarle’s 450,000]. The deferred value of those parcels is $1.6 billion, and the deferred taxes are $13.5 million.” He also noted that an additional 1,300 parcels (104,500 acres) are held in conservation easements, a different designation that also results in reduced taxation via a lower tax rate on market valuation.
“We have been doing a clean-up process for several years to make sure properties are qualified properly for these programs and to remove those that aren’t,” resulting in a recapture of $1.1 million for 106 parcels in 2021. Though the raw number of protected properties has been going down due to this purge, their deferred value and deferred taxes are still going up year over year.
Lynch noted that a significant number of landowners in the land use program have failed to file paperwork to continue in the program this year. “We extended the due date [for the ‘revalidation’ paperwork] but 248 property owners still did not file, and this is concerning—it is much higher than any revalidation [decline] that we’ve had since 2009,” he said. “We will notify property owners and the notice will say ‘removed from land use,’ and it will be clear that they now owe current year plus five years back taxes. Those owners will have the opportunity to reapply.”
June 25 is the due date for taxpayers to pay their tax bills after the Board of Supervisors sets the 2022 tax rate in the spring. Lynch recommended that if citizens have questions about their assessment, they should call the County Assessor’s office and speak with the appraiser who handles their specific property. Citizens may request a review of the assessment (which must be submitted by February 28) and if still unsatisfied, they may request a Board of Equalization Appeal (by March 30).