SC Administrative Law Court Decisions

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of evidence:

1. Notice of the time, date, place, and nature of the hearing was timely given to all parties.

2. The Petitioner (Petitioner) owns the property located at 211 Carolina Drive, Loris, South Carolina, identified as Tax Map No. 048-00-02-056.

3. Horry County conducted a county-wide reassessment for the tax years 2005 and 2006, based upon a mass appraisal. The value of the property during the 2005 assessment was determined to be $254,800.00. The value of the property during the 2006 assessment was determined to be $275,100.00. The Petitioner challenged this value, arguing that his property is not worth the price the Assessor assigned to it.

4. The Petitioner requested a review of this appraisal. The Horry County Assessor’s office scheduled a conference to review the tax assessment. A conference was held on December 19, 2005 for the 2005 tax year. This conference resulted in no change to the assessed value of the property. A conference was held on October 16, 2006 regarding the 2006 tax year. This conference resulted in a reduced assessment from $275,100.00 to $249,700.00.

5. The Petitioner requested review of the appraisals from the conferences. As a result of this appeal, the Assessor performed an onsite inspection of the subject property. During the inspection, the Assessor determined that the subject appeared to be in average to good condition for a home built in 1997. The Assessor noted that the subject property consists of approximately 1.55 acres which contains a single story residential structure with additional living area on a second level. The total heated area of the subject property is 2,789 square feet.

6. For the 2006 tax year, the assessor also noted a pre-engineered metal garage building with an eave height of 14 feet and containing 1,800 square feet had been constructed. The building permit indicated a value of $50,400.00 for this structure.

7. Following this onsite inspection, the Assessor lowered the appraisal of the property from $254,800.00 to $229,400.00 for the 2005 tax year. The assessor affirmed the value from the conference for the 2006 tax year of $249,700.00.

8.      Upon appeal to the Horry County Board of Assessment Appeals, the Board

further lowered the value of this property to $217,800 for the 2005 tax year, and $237,500 for the 2006 tax year. The Petitioner was not satisfied with these reduced valuations and timely appealed these decisions to the ALC.

9. Petitioner believes that the value of the property should be further lowered because his home was not equitably assessed in relation to similarly situated homes. Specifically, he argues that homes in the neighborhood that were on the market simultaneously and sold for comparable amounts were increased significantly less than the subject property. Petitioner believes a more just figure would be one that increases his assessment by a factor that is close to that of comparable homes.

10. The Assessor performed a land appraisal report which looked at a market sales

comparison of the Petitioner’s property to ascertain its value as part of this case. In utilizing the market sales comparison approach, the appraiser looked at comparable sales of similar properties to obtain an accurate appraisal of the worth of the Petitioner’s property. The following chart summarizes the findings of the appraiser:

2005 Tax Year

2006 Tax Year

Each of these comparables is similarly constructed in the subject property’s immediate neighborhood.

11. The subject’s value estimate per square foot in each tax year is below the value range for the comparable properties, as indicated by the comparison charts.

12. Petitioner argues that his property was not fairly assessed because the 2005 reassessment of his property in the amount of $229,400 was an increase of 34%, while neighbors received an increase of 17%. Upon inspection, the assessor realized there was an error in the amount of heated square footage contained within the subject property. The assessor sent a representative to measure the property in order to ascertain the correct square footage. The assessor’s office subsequently lowered the assessed value to accurately reflect the reduced square footage. The assessor’s reduction in value brings the Petitioner’s property in line with the assessed values of the neighboring properties as well as market comparables.

13. Petitioner is a credible witness who aggressively advocated his position on appeal to the Board, resulting in a $37,000.00 reduction of his property’s initial assessment in 2005 and a $37,600.00 reduction of the initial assessment in 2006. Petitioner did not offer any contradictory market sales analysis as to the specific value of the subject property to warrant a further reduction. Therefore, I find that the assessed values by the Board of Assessment Appeals of $217,000.00 for the 2005 tax year and $237,500 for the 2006 tax year are correct.

CONCLUSIONS OF LAW

Based upon the above findings of fact, I conclude the following as a matter of law:

1. S.C. Code Ann. § 12-60-2540 authorizes the ALC to hear this contested case pursuant to Chapter 23 of Title I of the 1976 Code of Laws, as amended. The taxable status of real property for a given year is to be determined as of December 31 of the preceding tax year. S.C. Code Ann. § 12-37-900; Atkinson Dredging Company v. Thomas, 266 S.C. 361, 223 S.E. 2d 592 (1976).

2. In S.C. Code Ann. § 12-37-930 (Supp. 2007) the Legislature set forth how real property must be valued:

All property must be valued for taxation at its true value in money which in all cases is the price which the property would bring following reasonable exposure to the market, where both the seller and the buyer are willing, are not acting under compulsion, and are reasonably well informed of the uses and purposes for which it is adapted and for which it is capable of being used.

Therefore, fair market value is the measure of true value for taxation purposes. Lindsay v. S.C. Tax Comm’n, 302 S.C. 504, 397 S.E. 2d 95 (1990). There is no valid distinction between market value for sales purposes and market value for taxation purposes under S.C. Code Ann. § 12-37-930. S.C. Tax Comm’n v. S.C. Tax Board of Review, 287 S.C. 415, 339 S.E. 2d 131 (Ct. App. 1985).

3. An Assessor’s valuation is presumed correct and the property owner bears the burden of proving the Assessor’s determination is not correct. 84 C.J.S. Taxation § 410 (1954). Ordinarily, this is done by proving the actual value of the property. The taxpayer may, however, show by other evidence that the assessing authority’s valuation is incorrect. If he does so, the presumption of correctness is removed and the taxpayer is entitled to appropriate relief. Cloyd v. Mabry, 295 S.C. 86, 367 S.E. 2d 171 (Ct. App. 1988).

4. While not conclusive, market sales of comparable properties present probative evidence of fair market value of similar property. 84 C.J.S. Taxation § 411 (1954). Furthermore, in estimating the value of property, all of the factors which affect market value or would influence the mind of a purchaser should be considered, such as location, quality, condition and use. See 84 C.J.S. Taxation § 410 at 784; § 411 at 794 (1954).

5. South Carolina courts, as well as other jurisdictions, have relied on the Appraisal Institute’s standards for valuation as published and updated in several editions of The Appraisal of Real Estate. See, e.g., South Carolina Tax Comm’n v. South Carolina Tax Board of Review, 287 S.C. 415, 339 S.E. 2d 131 (Ct. App. 1985); Badische Corporation (BASF) v. Town of Kearny, 288 N.J. Super. 171, 672 A.2d 186 (1996).

6. To determine a fair market price for the Taxpayers’ property, comparisons of the sale price of other properties of the same character may be utilized. See Appraisal Institute, The Appraisal of Real Estate 367 (10th ed. 1992); Cloyd v. Mabry, 295 S.C. 86, 367 S.E. 2d 172 (Ct. App. 1988); 84 C.J.S. Taxation §§ 410-411 at 785, 797 (1954). While it is impossible to predict with certainty what a particular property will sell for, utilizing comparable sales is a good indicator of what a potential purchaser will likely pay and it provides probative evidence of the market value of the subject property, if the comparables are similar in character, location, and physical characteristics. See 84 C.J.S. Taxation § 411 (1954).

7. In the instant case, the Taxpayer failed to meet his burden of proof of showing the Board of Assessment Appeal’s valuation is incorrect. I conclude that the sales comparison approach employed by the Assessor’s appraiser in arriving at the value of the subject property correctly established its value for both tax years.

ORDER

Based upon the above Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that the Assessor value the Petitioner’s property for the tax year 2005 at $217,800.00 and for the tax year 2006 at $237,500.00.

AND IT IS SO ORDERED.

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CAROLYN C. MATTHEWS

March 12, 2008 Administrative Law Judge

Columbia, South Carolina