ORDERS:
FINAL ORDER AND DECISION
I.
Introduction
This contested case results from
a disagreement for the 2004 tax year between Patrick and Vivian Henry
(Taxpayer) and the Oconee County Assessor (Assessor) concerning the value of an
improved lot owned by the Taxpayer. Having exhausted the prehearing remedies
within the Assessor's office and before the Oconee County Board of Assessment
Appeals, the parties now bring this contested case to the Administrative Law
Court. Jurisdiction is provided by S. C. Code Ann. Sec. 12-60-2540(A) (Supp.
2005).
After timely notice to the
parties, a hearing of this matter was held at the Laurens County Court House in
Laurens, South Carolina. Based upon the evidence and arguments presented at
that hearing, I find that the value of Taxpayer's property for the 2004 tax
year is $703,500.
II. Issue
What is the value of the
Taxpayer's property for assessment purposes for tax year 2004?
III. Analysis
A. Findings of Fact
Based on the preponderance of the
evidence, the following findings of fact are entered:
Taxpayer's property is located in
Oconee County at 123 Wynward Pointe Drive and is identified as Tax Map number
124-07-01-017. The lot consists of slightly more than one acre and
approximately 100 feet of waterfront footage on Lake Keowee.
The improvements consist of a
residence having an above grade living area of 4,087 square feet and the
finished walk-out basement of 1825 feet for a total finished square footage of
5,912. In addition, the property has a ramp and covered boat dock providing
access to Lake Keowee.
To determine the market value of
the property, the Assessor primarily relied upon a sales comparison approach to
valuation using information from actual sales of comparable properties to
arrive at the market value for the subject property. The Assessor chose the
comparable properties based on their similarities in size, design, age, and
location to the subject property.
Sales relied upon by the Assessor
are in the immediate neighborhood and are of similar size and configuration.
As adjusted, Sale 1 sold in 2003 and presents a value of $976,500 for a
finished square footage of 7,853. Sale 2 sold in January 2004 and establishes a
value of $1,083,000 for a finished square footage of 8,904 square feet.
Finally, Sale 3 sold in July 2004 and establishes a value of $825,600 for a
finished square footage of 7,413. Accordingly, the value per square footage of
comparable properties is $124.34, $121.63, and $111.37 or an average of $119
per square foot.
B. Conclusions
of Law
Based on the foregoing Findings
of Fact, I conclude the following as a matter of law:
The South Carolina Administrative
Law Court has jurisdiction over this matter pursuant to S.C. Code Ann. Sec.
12-60-2540(A) (2000), S.C. Code Ann. Sec. 1-23-600(B) (Supp. 2005), and S.C.
Code Ann. Sec. 1-23-310 et seq. (2005). In exercising such jurisdiction, the
matter is heard de novo as a contested case hearing to determine the
appropriate valuation of the property in question based upon the evidence
presented. See Smith v. Newberry County Assessor, 350 S.C. 572,
577, 567 S.E.2d 501, 504 (Ct. App. 2002) ("When a tax assessment case
reaches the ALJ in this posture [i.e., upon appeal from a county board of
assessment appeals], the proceeding in front of the ALJ is a de novo
hearing."); see also Reliance Ins. Co. v. Smith, 327 S.C.
528, 535, 489 S.E.2d 674, 677 (Ct. App. 1997) ("[A]though a case involving
a property tax assessment reaches the ALJ in the posture of an appeal, the ALJ
is not sitting in an appellate capacity and is not restricted to a review of
the decision below. Instead, the proceeding before the ALJ is in the nature of
a de novo hearing.").
When determining the appropriate
valuation "[g]enerally, the proper valuation of realty for taxation is a
question of fact, to be ascertained in each individual case in the manner
prescribed by statute." 84 C.J.S. Taxation Sec. 510, at 553
(2001). The statute for valuation in South Carolina explains that 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. S.C. Code Ann. Sec.
12-37-930 (Supp. 2005). Thus, the fair market value of property is the measure
of its true value for taxation purposes. See Lindsey v. S.C. Tax Comm'n,
302 S.C. 504, 507, 397 S.E.2d 95, 97 (1990).
Under South Carolina law, a
presumption exists that an Assessor's valuation is correct (see S.C. Tax
Comm'n v. S.C. Tax Bd. of Review, 278 S.C. 556, 562, 299 S.E.2d 489,
492-93 (1983)), and, in a challenge to such a valuation, the taxpayer bears the
burden of demonstrating that the Assessor's valuation is incorrect. See Newberry
Mills, Inc. v. Dawkins, 259 S.C. 7, 15-16, 190 S.E.2d 503, 507 (1972).
Ordinarily, the taxpayer meets this burden by proving the actual value of the
property. See Cloyd v. Mabry, 295 S.C. 86, 88-89, 367 S.E.2d 171,
173 (Ct. App. 1988).
Therefore, in the case at hand,
Taxpayer bears the burden of proving, by a preponderance of the evidence, that
the Assessor's valuation is incorrect, either by demonstrating fatal errors in
the Assessor's valuation or by establishing the actual value of the property.
In the instant case, Taxpayer has met that burden.
Use of the "comparable sales
approach" is widely recognized as a valid method of arriving at the fair
market value of real estate. See Smith v. Newberry County Assessor,
350 S.C. 572, 580, 567 S.E.2d 501, 505 (Ct. App. 2002); 84 C.J.S.
Taxation sec. 512. In fact, if sufficient information regarding comparable
sales is available, the sales comparison approach "is the most
straight-forward and simple way to explain and support a value opinion." The
Appraisal of Real Estate, supra, at 419. Here, the sales data shows
credible comparables demonstrating an average value per finished square foot of
$119. Accordingly, with 5,912 finished square feet, Taxpayer's property for
the 2004 tax year yields a value of $703,500.
III.
Order
Accordingly, the value for
property tax purposes for the 2004 tax year is $703,500.
AND IT IS SO ORDERED
______________________
RAY N. STEVENS
Administrative
Law Judge
Dated: December 29, 2005
Laurens, South Carolina |