Reassessment Value Change Due to Home Mortgage Crisis

The Clarke County Offices of the Commissioner of the Revenue and County Assessor have received many calls lately from homeowners asking for their property value to be lowered because of the current market slump.  We understand that concern, but thought we might save you some time and money by providing the answer to your question via our website.

                Clarke County is required by state law to conduct a reassessment at least every sixth year or sooner.  They are normally done every four years, the last becoming effective on January 1, 2006.  The state requires that reassessments, at the time they are completed, be based  as close as possible to 100% of fair market value.  The values adopted at that time were based on arms-length sales of properties similar in type (residential, commercial, etc.), location and construction that took place during the previous four year period.  Many of these sales took place in 2004 and 2005.

                As you well know, these years were “hot market” years that began to cool just as the reassessment became effective.  Some of you may remember a similar situation that occurred after the reassessment that became effective in 1990, based on sales from the prior four years.

                The County, by state law, is not permitted to reap a financial windfall from a higher reassessment.  If it appears that a windfall should occur as a result of the existing real estate tax rate, the rate must be lowered to one that permits no more than a one percent increase in the total real estate levy.  The resulting levies on individual properties may be slightly higher or slightly lower.  You may recall that in 2006 the tax rate was lowered from $0.81 per hundred dollars of assessed value to $0.42 cents.  This lower rate became the new base real estate rate.  As in any other year, if more money is needed for county budget necessities, a public hearing must be held before final judgment is made.  A hearing was held and a rate of $0.45 was adopted.  It has been changed in 2007 and 2008, always with a hearing.  The current (2008) tax rate is $0.50 per one hundred dollars of assessed value.

                Back to reassessments.  Bids to perform reassessments are made by experienced appraisal firms, then interviewed and selected by the County.  They are then appointed by the Commonwealth of Virginia as the reassessment authority.  When the reassessment is completed, public hearings are held by the appointed firm, which can make changes to their valuations.  Further hearings are conducted by a Circuit Court appointed Board of Equalization.  This Board is composed of real property owners from Clarke County.  Assessments may be adjusted, or equalized, by this Board.  A final appeal may be made to the Circuit Court but very few are made.


The reassessment values remain in place for the four-year period.  New construction or land splits occurring during the period must be assessed by the Clarke County Assessor using value indicators that were developed for the current reassessment period.  This insures that all property is assessed equitably during the effective period. Lowering individual property values would upset the equity of the system.

 Could reassessments be done more often?  Yes, but there are many things to consider, not the least of which is cost.  The purchase cost of the most recent reassessment contract (by itself) was nearly $110,000.  Consider what has happened to the cost of gasoline since 2005.  To have two assessors drive all over the County, down farm roads and lanes…you can imagine what the next one will cost.  Then add the cost of services (manpower and equipment) for the sets of hearings, travel by the Equalization Board, etc.   

                A last note:  when values rose so high and so fast during the 2002 to 2006 period, the county was unable to change the assessments, but instead had to abide by values established in the period 1998 to 2001.  Those values were lower and had to be carried into the 2002 to 2006 period.  During that period, people were buying homes for $500,000 and paying taxes on value assessments in the high 200’s or low 300’s. The tax rates were much higher then (three years at $0.74 for three years and $0.81 for one year) to accommodate needs.  If the values come down, as they might for the next reassessment period, you can almost count on the tax rate going up again.  There are more people here now creating a demand for more services and placing an increased burden on all county government systems.

            This is intended to show the reasons behind the inability to lower values, even though the market has changed.  We couldn’t do it when the market rose several years ago, nor can we when the market is slumping.  Current sales (the good ones, done at arm’s length) will be considered when the next reassessment is conducted during 2009, to be effective in 2010.  We hope this has helped your understanding of this issue.