ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This is a contested case brought by the Petitioners concerning a property valuation for the 1999 tax year. The Petitioners
exhausted their prehearing remedies with the Assessor and the Newberry County Board of Assessment Appeals (Board) and
sought a contested case hearing before the Administrative Law Judge Division (ALJD or Division). A hearing was held at
the office of the Administrative Law Judge Division on March 7, 2000.
ISSUE
What is the appropriate market value for tax year 1999 of parcels of real property located in Newberry County, South
Carolina, also known as Tax Map No. 4-1-46 and Tax Map No. 4-1-47?
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 date, time, place, and nature of the hearing was timely given to all parties.
2. The Petitioners (Taxpayers) own a 1.33 acre parcel located at 83 Wooden Dock Court, Cross Hill, South Carolina
identified as Tax Map No. 4-1-46 and Tax Map No. 4-1-47. The property consists of lot 46 and a portion of lot 47 located
in the Summerset Bay Subdivision on Lake Greenwood. Lot 47 was subdivided and a portion of the lot was purchased by
the Taxpayers. The remaining portion of lot 47 was purchased by the owners of lot 48 in the same subdivision. Upon the
property is a two story single-family dwelling with a detached garage. However, at the time of the reassessment, the
property was vacant. The dwelling was built after the 1999 tax assessment and is, therefore, not part of the tax
reassessment.
3. Newberry County conducted a county-wide reassessment for the tax year 1999. Pursuant to that reassessment the
Respondent (Assessor) notified the Taxpayers that the total assessed market value of their property had increased to
$85,750. The assessment was based upon a mass appraisal. The mass appraisal was conducted by performing market
research to determine market value on Lake Greenwood. The Assessor looked at resale information for Summerset Bay and
Summerset Point for the years 1997 and 1998 which included sales sheets, tax maps, and tax cards. The review of the
Summerset Bay Subdivision included approximately 19 lots, none of which were the Taxpayers. According to the Assessor,
these sales revealed an upward trend of 4 percent appreciation per year and supported a value of $350 per water front foot.
With that valuation, the majority of lots fell within the Department of Revenue acceptable standards of 80% to 105% of fair
market value with the average percent to value being 90%. The Department of Revenue approved the reassessment program
on December 18, 1998.
4. After receiving the notice of an increase, the Taxpayers requested that the Assessor review its valuation of their property.
The Assessor did not perform a Uniform Residential Appraisal Report on the subject property but relied on the mass
appraisal to determine that no changes to the valuation and assessment of the property would be made. The Taxpayers then
filed an informal appeal with the Newberry County Tax Appeals and Review Board. The Board convened on September 23,
1999 to make a physical inspection of the property owned by the Taxpayers. The Board reconvened on October 1, 1999 to
deliberate on the appeal of the Taxpayers. Both the Taxpayers and the Assessor were present at the meeting and presented
testimony. Following the meeting, the Board accepted the appraisal of the Assessor and denied any change to valuation and
assessment of the property.
5. The Assessor contended the mass appraisal computed fair market value for the subject property. However, I find that the
Assessor's evidence did not support this contention since no individual evaluation was made of the Taxpayers' property.
The Taxpayers' property was not among the lots evaluated for the mass appraisal and the Assessor testified that a Uniform
Residential Appraisal was not performed on the property. The most accurate and persuasive evidence presented of the value
of the subject property is the Taxpayers' market sales appraisal.
6. The subject property is a triangular shaped point lot consisting of 248 feet of water front. The property has a good view
and ample water depth. The Taxpayers argue that the market value for the subject property was $61,000. In support of
their position, the Taxpayers presented a formal appraisal of the property conducted by a licensed South Carolina appraiser.
The appraiser used a market sales comparison approach to determine the value of the property. In utilizing the market sales
comparison approach, the appraiser looked at sales of similar property with 200 plus feet of water front located in the
Summerset Bay Subdivision. Eleven lots had previously sold which fit these criteria, three of which had sold six to twelve
months prior to the appraisal.
The appraiser also conducted a study of all sales from January 1999 to September 1999 and found that as the water frontage
increased from 200 feet, the value of the property per front foot decreased. He determined that the property sales in
Summerset Bay having 200 plus feet of water front sold for an average of $240 to $250 per water front foot. He used the
sales price plus the front footage to derive a price per water front foot
The appraiser used three comparable sales which occurred six to twelve months prior to the appraisal to determine the
specific price per water front foot for the subject property. He restricted the comparables to the Taxpayers' immediate
neighborhood minimizing the need for adjustments. All comparables had the same restrictive deed covenants, availability of
utilities, and approximate size (1 plus acres). The comparable sales used were Lots 50 and 51 (comparable 1), Lot 6
(comparable 2), and Lots 43 and 44 (comparable 3).
Comparables 1 and 3, like the subject property, were multi-lot sales. Comparable 1 consisted of 247 feet water front and
sold for $61,500 equating to $249 per foot water front. Comparable 1 has a view and water depth equal to the subject
property. However, Comparable 1 is rectangular in shape as opposed to triangularly shaped like the subject property.
Additionally, though no evidence directly established that the sale of Comparable 1 was not an arms-length tranaction,
Comparable 1 was a repurchase by the developer. However, when the developer repurchased the property, he was no longer
involved with the development of Summerset Bay and had divested himself of all properties in the subdivision. Furthermore,
the lots were repurchased at a price higher than what the developer sold them for two years earlier.
Comparable 2 is similar to the subject property in view, shape, and location. It consists of 206 feet water front and sold for
$49,500 equating to $240 per foot water front. However, Comparable 2 involved a sale of property by a father/mother to a
son.(1) Therefore, I find that Comparable 2 is not an acceptable comparable.
Comparable 3 has a location and water depth equal to the subject property. Comparable 3 is also triangular in shape much
liked the subject property. It consists of 268 feet water front and sold for $40,000 equating to $149 per foot water front.
However, Comparable 3 is a cove lot with an inferior view and usable water front footage. The appraiser made a $100 per
foot front adjustment to the value of this Comparable for an inferior cove view and usable water front footage.
7. I find that Comparable 3 is the best reflection of the value of the Taxpayers' property. However, I find that a $120 per
foot adjustment to Comparable 3 is warranted in order to reflect the superior view and usable water front footage of the
Taxpayers' property. Therefore, utilizing the price per foot of water front as the primary indicator of value, I find that the
market value of the subject property is $66,712 (248 feet of water front multiplied by $269).
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 (Sup. 1998) authorizes the Division 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 (1976); 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. 1998) the Legislature set forth how real property must be valued:
All real property shall be valued for taxation at its true value in money which in all cases shall be held to be the price which
the property would bring following reasonable exposure to the market, where both the seller and buyer are willing, are not
acting under compulsion, and are reasonably well informed as to the uses and purposes of 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, 189 (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 Taxpayers have met their burden of proof of showing the Assessor's valuation is incorrect. I
conclude that the market approach employed by the Taxpayers' appraiser in arriving at the value of the subject property is
the correct approach.
ORDER
Based upon the above Findings of Fact and Conclusions of Law:
IT IS HEREBY ORDERED that the Assessor value Petitioners' property for the tax year 1999 at $269 per water front
foot.
AND IT IS SO ORDERED.
___________________________
Ralph King Anderson, III
Administrative Law Judge
July 17, 2000
Columbia, South Carolina
1. The appraiser made no adjustment for that fact that the sale was between family members. |