ORDERS:
FINAL ORDER AND DECISION
I.
Introduction
This contested case results from
a disagreement for the 2003 tax year between William D. and Barbara R.
McConnell (Taxpayer) and the Anderson 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 Anderson 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 Anderson County Court House
in Anderson, 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 $86,120 for the 2003 tax year in question.
II. Issue
What is the value of the
Taxpayer's property for assessment purposes for tax year 2003?
III. Analysis
A. Findings of Fact
Based on the preponderance of the
evidence, the following findings of fact are entered:
Taxpayer is the owner of a parcel
of real property located in Anderson County on Hartwell Lake with the property
identified for tax purposes as Tax Map number 032‑06‑03‑007.
For the 2003 tax year, the Assessor valued the subject properties at $86,120.
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.
The property is located in a
lakefront community which consists of a mixture of mobile homes, summer
cottages, and year round residents. The lot here under review has 85 feet of
frontage on Hartwell Lake. The property is a level lot, is on open water, is
in the "green zone," and has a dock. In addition to the land, the
lot contains a mobile home of limited value.
Sales relied upon by the Assessor
are in the immediate neighborhood and are of similar size. Sale 1 sold in 2002
for $100,000, and has 75 feet of lakefront, 10 feet less than the subject
property. Sale 2 sold in 2001 for $100,000, and has 100 feet of lakefront. Sale
3 sold in 2001 for $98,000 with 75 feet of lakefront. Sale 4 is located on the
other side of Providence Church Road in a cove and sold in 2002 for $80,000 and
has 85 feet of waterfront.
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). 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).
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.
Here, in the instant case, Taxpayer has not met that burden.
Taxpayer did not demonstrate that
the Assessor's appraisal was flawed or inaccurate in any way, nor did he
establish an actual value for either property that differed from the Assessor's
valuation. While Taxpayer did present his view of what the properties should
appraise for, he did not provide reliable comparables sufficient to offset the
comparables presented by the Assessor.
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 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 Assessor selected
comparable properties similar to the subject property in location and quality
so that the valuation derived from the sales data presents a reliable indicator
of the fair
market value of Taxpayer's
properties.
The Assessor attributed only
$1,120 to the improvement. Thus, the predominate value of the property is in
the land value. Here, the sales establish that comparable lots produce a value
of approximately $1,000 per front foot. In this case the Assessor has valued
the subject lot at $85,000. Thus, given that the subject's waterfront footage
is 85 feet and that the Assessor's value for the land is $85,000, the value of
$86,120 is properly supported and establishes the proper value for the 2003 tax
year.
III.
Order
Accordingly, the Assessor's value
is properly supported and the value for the 2003 tax year is $86,120.
AND IT IS SO ORDERED
______________________
RAY N. STEVENS
Administrative
Law Judge
Dated: December 29, 2005
Anderson, South Carolina |
