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 (Taxpayer) owns two lots located at 1167 Kenneth Drive, Lexington, South Carolina, identified as Tax Map No.006617-01-020. The property is used as rental property and is not occupied by the owner. The property consists of 0.15 acres with a 828 square foot building upon it.

3. Lexington County conducted a county wide reassessment for the tax year 2001, based upon a mass appraisal. The value at that time was set at $45,000. In 2002, the Petitioner challenged the assessment and the value was lowered to $27,500. This valuation held for 2003. In 2004, Petitioner challenged the valuation of $27,500. The Assessor conducted a market sales analysis of the property and determined based upon that analysis the market value of the property was correct. The Taxpayer argues that his property is not worth the price the Assessor assigned to the subject property.

4.                  Upon appeal to the Lexington County Assessment Appeals Board, the Board

upheld the value of this property at $27,500. The Petitioner was still not satisfied with this valuation and timely appealed this decision to the ALC.

5.                  The Assessor performed a market sales analysis of the Petitioner’ property to

ascertain its value as part of this case. In utilizing the market sales comparison approach, the appraiser looked at three comparable sales of similar property to obtain an accurate appraisal of the worth of the Petitioner’ property. The Petitioner refused to allow the Assessor’s appraiser access to his property to determine the condition of the home.^[1]

Comparable one is located four miles northwest of the subject property, and sold in June 2001 for $26, 000. It is .25 acres with a 824 square foot home on it. The appraiser adjusted the sales price upward $7,680 due to: 1) the age of the sale and the fact that it was a cash sale; 2)the poor quality of comparable one; and 3) the smaller square footage. The resulting adjusted sales price was $33,680.

Comparable two is located eight miles northeast of the subject property, and sold in July 2003 for $30, 000. It is .30 acres with a 806 square foot home on it. The appraiser adjusted the sales price upward $1,540 due to its: 1) smaller square footage; and 2) lack of central heat and air as in the subject property. (It has a window unit.) The resulting adjusted sales price was $31,540.

Comparable three is also located eight miles northeast of the subject property, and sold in May 2003 for $38,950. It is .84 acres with a 794 square foot home on it. The appraiser adjusted the sales price downward $6,900 due to the comparable’s larger acreage. The appraiser also adjusted the sales price $2,500 higher to offset: 1) smaller living area and 2) lack of central heat and air as in the subject property. The resulting adjusted sales price was $34,550.

The Petitioner did not offer any contradictory market sales analysis as to the specific value of the subject property. Mr. Sprague offered some facts that he felt should decrease the value of the property, specifically dealing with whether the structure on the subject property was permanent.^[2] He did not, however, submit any appraisals or specific facts to support his valuation.

6. The appraiser for the county presented detailed findings on each of the comparable properties and adjusted the prices as needed to allow for variations in the size, amenities and conditions of the comparable properties to the subject property. I specifically find that the comparables selected are all valid indicators of the value of the subject property.

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 (2003) 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 (2003); 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. 2003) 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 Assessor’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.

ORDER

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

IT IS HEREBY ORDERED that the Assessor value the Petitioner’ property for the tax year 2004 at $27,500.

AND IT IS SO ORDERED.

___________________________________

CAROLYN C. MATTHEWS

Administrative Law Judge

June 14, 2005

Columbia, South Carolina