ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
The above-captioned matter comes before this Court pursuant to S.C. Code Ann. § 12-60-2540(A) (2000), S.C. Code Ann. § 1-23-600(B) (Supp. 2004), and S.C. Code Ann. §§ 1-23-310 et seq. (2005) for a contested case hearing. Petitioner Naomi Mayers (Taxpayer) challenges the valuation of her property located at 123 Washington Street in Prosperity, South Carolina, by Respondent Newberry County Assessor (Assessor) for the 2002, 2003, and 2004 tax years. Prior to bringing this contested case matter, Taxpayer exhausted her administrative remedies with the Assessor and with the Newberry County Board of Assessment Appeals.
After timely notice to the parties, a hearing of this matter was held on September 27, 2005, at the Administrative Law Court in Columbia, South Carolina. Based upon the evidence and arguments presented at that hearing, I find that the Assessor properly assessed the value of Taxpayer’s property at $31,800 for the tax years in question.
FINDINGS OF FACT
Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:
1. Taxpayer is the owner of real property located at 123 Washington Street in the town of Prosperity in Newberry County, South Carolina. The property is identified for tax purposes as Tax Map # 464-2-6-11.
2. For the 2002, 2003, and 2004 tax years, the Assessor valued the subject property at $31,800. To determine the market value of the property, the Assessor performed an individualized appraisal of the subject property. In that appraisal, the Assessor primarily relied upon a sales comparison approach to valuation, which uses information from actual sales of comparable properties to arrive at the market value for the subject property. The Assessor chose the comparable properties used in the appraisal based on their similarities in size, design, age, and location to the subject property. In the appraisal, the Assessor concluded that the fair market value of Taxpayer’s property was $31,800, as of April 15, 1999.
3. The Assessor relied upon sales of three comparable properties in determining the market value of Taxpayer’s real estate. The first comparable property is located at 509 McNeary Street in Prosperity, approximately one-tenth of a mile from the subject property. As a sixty-year-old, twelve-hundred-square-foot bungalow in average condition, the first comparable is similar to the subject property in age, size, and design. The first comparable property sold for $47,000, or $36.75 per square foot, on January 11, 1999. The second comparable property is fifty-years-old and is located at 140 Elm Street, roughly six-tenths of a mile from the subject property. It is a thirteen-hundred-square-foot bungalow in average condition that sold for $35,000, or $25.31 per square foot, in September 1997. Somewhat newer and larger, the third comparable property is a sixteen-hundred-square-foot bungalow in average condition that is only forty years old. The comparable is located at 135 Church Street, approximately one-half mile from the subject property, and sold for $35,000, or $21.10 per square foot, in September 1997. In deriving a market value for Taxpayer’s property from the sales of comparable properties, the Assessor made adjustments in the sales prices of the comparables to account for differences between the comparable properties and the subject property in such matters as lot sizes, gross living areas, heating and cooling systems, and other features. See Respt. Ex. #13.
4. Taxpayer appealed the Assessor’s valuation of her property to the Newberry County Board of Assessment Appeals, which, on April 7, 2005, affirmed the Assessor’s valuation of Taxpayer’s property at $31,800. Respt. Ex. #16, at 4. Taxpayer now challenges the Assessor’s valuation of her property before this Court. Specifically, Taxpayer contends that, because she was not able to find a buyer willing to purchase the property for $20,000 when she put it on the market in 1996 and 1997, the Assessor’s valuation of the property at $31,800 is excessive and a fair valuation of the property would fall at or below $20,000.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:
1. The South Carolina Administrative Law Court has jurisdiction over this matter pursuant to S.C. Code Ann. § 12-60-2540(A) (2000), S.C. Code Ann. § 1-23-600(B) (Supp. 2004), and S.C. Code Ann. §§ 1-23-310 et seq. (2005).
2. While this matter reaches this Court somewhat in the posture of an appeal, the proceeding before this Court is a de novo contested case hearing to determine the appropriate valuation of the property in question based upon the evidence presented at the hearing. 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.”).
3. “Generally, 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 § 510, at 553 (2001).
4. Under South Carolina law,
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. § 12-37-930 (Supp. 2004). In short, 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).
5. There is a presumption that an assessor’s valuation of a piece of property 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 of her property at 123 Washington Street in Prosperity, South Carolina, is incorrect, either by demonstrating fatal errors in the Assessor’s valuation or by establishing the actual value of the property.
6. In the instant case, Taxpayer has not met her burden. Taxpayer did not demonstrate that the Assessor’s appraisal of her property was flawed or inaccurate in any way, nor did she establish an actual value for her property that differed from the Assessor’s valuation. While Taxpayer did present some information about three other properties in Newberry County at the hearing, Taxpayer did not show that these properties were comparable to her property and did not present any orderly analysis of the information regarding those properties from which to derive a market value for her property. For example, Taxpayer did not establish that sales information for these properties, which are located in the town of Newberry, would be relevant for determining property values in the town of Prosperity, where her property is located.
7. Moreover, I find that the Assessor’s appraisal of Taxpayer’s property presents a credible and accurate fair market value for the property. In reaching a valuation of the property, the Assessor applied the sales comparison approach of valuation, which is “[a] set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison, and making adjustments to the sale prices of the comparables based on the elements of comparison.” The Appraisal Institute, The Appraisal of Real Estate 417 (12th ed. 2001). This approach is widely recognized as a valid method of arriving at the fair market value of a piece 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 § 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. In the case at hand, the Assessor has selected comparable properties similar to the subject property in age, design, location, and quality, such that the valuation derived from sales data from those comparables is a reliable indicator of the fair market value of Taxpayer’s property. Accordingly, I find that, based upon the sales comparison approach employed by the Assessor, a valuation of $31,800 is a reasonable and fair assessment of the market value of Taxpayer’s property.
ORDER
Based upon the Findings of Fact and Conclusions of Law stated above,
IT IS HEREBY ORDERED that the Assessor shall assess Taxpayer’s property, located at 123 Washington Street in Prosperity, South Carolina, at a value of $31,800 for the 2002, 2003, and 2004 tax years.
AND IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative Law Judge
1205 Pendleton Street, Suite 224
Columbia, South Carolina 29201-3731
November 10, 2005
Columbia, South Carolina
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