ORDERS:
FINAL ORDER
STATEMENT OF THE CASE
Gene Hendrix brought this case to determine whether his property should be classified as agricultural for the property tax years 2002 and 2003, and whether the valuation determined by the county is correct. The Petitioner applied for and was denied agricultural assessment by the Assessor's Office for 3.53 acres he owns in Lexington County. Following an appeal to the Lexington County Board of Assessment Appeals, the Petitioner was again denied the agricultural assessment, and the fair market value of the property was upheld at $345,980. Mr. Hendricks then requested a hearing before the Administrative Law Court to consider these issues. A hearing on this matter was held on June 21, 2004 at the Court in Columbia, with the parties represented as indicated above. At the hearing, the Petitioner agreed to drop his request that this property be classified as agricultural property. He went forward on the issue of the valuation. Following this hearing on the merits, I find and conclude that the value set by the Assessor’s office and upheld by the Board of Assessment Appeals is correct.
ISSUE
What is the appropriate market value for the tax years 2002 and 2003 for the parcel of real property located in Lexington County, South Carolina, known as Tax Map Number 004300-03-145?
FINDINGS OF FACT
Based upon the written evidence submitted by the parties, the testimony taken at the hearing and taking into consideration the burden of proof, I make the following Findings of Fact by a preponderance of the evidence:
1. The property is located in Lexington County, South Carolina, and is identified on the
Lexington County Tax Map as Tax Map Number 004300-03-145 consisting of 3.53 acres. It is an unimproved lot with rolling terrain. The Petitioner purchased this property March 27, 2002 from his brother for $190, 000. The property is located near the town of Lexington along Highway 1, a major thoroughfare through Lexington County. At the same time, the Petitioner purchased several other parcels, not at issue in this particular matter, with a total acreage of 51.26 purchased all in Lexington County. 3.53 acre tract is not contiguous to the other parcels purchased simultaneously. There have been several properties near this parcel developed recently, as shown on the list of comparable property sales submitted by the county.
2. The Petitioner timely filed an application to contest the valuation of the property. Upon
further review, the County refused to change its valuation.
3. The Petitioner filed a written objection with the Assessor and appealed the matter to the
Lexington County Board of Assessment Appeals. The Assessment Appeals Board heard this
matter and concurred with the Assessor’s valuation of the subject property as $345,980. The Petitioner then appealed the decision of the Lexington County Board of Assessment Appeals.
4. The County presented comparable sales appraisals of six other parcels of land near the subject property. The sales price per square foot for these properties ranged from $2.30 to $5.76 per square foot. The range of adjusted price per foot by the appraiser for these comparable properties was $2.36 to $3.38. The adjusted range was due to access to Highway 1, frontage along this highway, topography and the amount of usable land in the parcel. The appraiser determined the adjusted price per square foot of the subject property to be $2.25, based on the amount of work needed on the subject property.
5. The Petitioner submitted a letter from an engineering company which showed that the Petitioner would need $341,000 in improvements in order to be able to develop the property.
CONCLUSIONS OF LAW
Based upon the above findings of fact, I conclude as a matter of law the following:
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 Petitioner 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.
The property owned by the Petitioner has been adequately and accurately assessed by the County. I find the appraisal submitted by the County to be accurate and thorough, and that the property is equitably assessed in accordance with state law. The Petitioner failed to prove, by a preponderance of the evidence, that the Assessor’s valuation of this property is incorrect.
ORDER
Based upon the above Findings of Fact and Conclusions of Law, it is hereby:
ORDERED that the 3.53acres of land of the Petitioner’s property designated as Tax Map Number 004300-03-145 be valued at $345,980, as determined by the Lexington County Assessor’s Office and upheld by the Board of Assessment appeals.
AND IT IS SO ORDERED.
_________________________________
Carolyn C. Matthews
Administrative Law Judge
July 20, 2005
Columbia, South Carolina |
