SC Administrative Law Court Decisions

This is a contested case brought by the Petitioner concerning a property tax valuation matter. Petitioner argues that the Richland County Assessor’s valuation of his real property located at 8608 Maywood Drive, Columbia, South Carolina is inaccurate and excessive. The Assessor argues that Petitioner’s property was accurately valued and that no reduction is warranted. After notice of the date, time, place, and nature of the hearing was timely given to all parties, a hearing was held at the Administrative Law Court on May 2, 2006.

ISSUE

What is the appropriate market value for the tax year 2004 for Petitioner’s parcel of real property located in Richland County, South Carolina?

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and taking into consideration the burden of persuasion and the credibility of the witnesses, I make the following findings of fact by a preponderance of evidence:

1. The Petitioner owns a parcel of property located at 8608 Maywood Drive, Columbia, South Carolina. The property is located in the Berkely Forest neighborhood, which is in the Southeast portion of Richland County approximately seven (7) miles from downtown Columbia. The thirty-four (34) year old home upon the property has approximately 1,998 square feet of heated living area. The home also includes a finished garage, deck, screened porch and pool.

2. The Richland County Assessor appraised Petitioners property at $111,600 for the tax year of 2004. After the Petitioner challenged that valuation, the Assessor gave the Petitioner thirty (30) days in which to provide information that would alter the valuation of the property. Based on the information provided to the Assessor and a drive-by of the property, the value was reduced to $109,200.^[1] Petitioner appealed that valuation to the Board of Appeals. After that appeal, Elizabeth McDonald went to Petitioner’s property to view the inside of the home on March 23, 2005. Upon review, she discovered a pool, screened in porch and deck which were not in the records.^[2] As a result, the Assessor increased the value of the property to $116,800. After a hearing the Board affirmed the Assessor’s value of $116,800 for tax year 2004.

4. The Assessor applied the market approach and cost approach valuation methods to arrive at the final valuation of $116,800. The cost approach considers the cost of adding equivalent amenities to determine the increased value to the property. The market sales analysis approach looks at sales of similar property in the same area to obtain a determination of the worth of the property. The best approach to determining the fair market value of the property in this case is using a market sales comparison approach.

The appraiser used three comparable sales of homes to determine the value of the subject property.^[3] Comparable one is located at 8705 Gnadenhunt Road. It has approximately the same square footage, a larger porch and no pool. This home was built the same year as Petitioners home. The appraised value of comparable one was $119,000 or $63 per square foot.

Comparable two is located at 2840 Cliffside Circle. This home was built in 1988, has approximately 1,700 square feet and a porch that is four times larger than Petitioners porch. The appraised value of this home was $107,000 or $62 per square foot. Lastly, comparable three is located at 2925 Plymouth Rock. This home is approximately the same age as Petitioners but with less square footage. The appraised value of this home was $103,500 or $64 per square foot. All three comparables are located with one-half (½) mile of Petitioners home and are similar in quality of construction and marketability.

The Petitioner offered his own comparables for review, which included two homes about 2 blocks south of his property. The price per square foot on Petitioners comparables ranged from $56 to $57. Mr. Godfrey also testified that his home is bordered by other homes with unsightly yards. He contends that the neighbors park multiple cars in their backyard and also have a dog pen located in the yard. Furthermore, he argued that his pool is more than twenty years old and in need of repair, which should diminish the value of the home rather than increase it.

I find that the three comparables offered by the Assessor best reflect the market value of Petitioner’s home. Though the homes adjacent to the Petitioner may make his home less desirable, the Assessor’s assessed value of $58 per square foot for Petitioner’s home, as opposed to the value of at least $62 per square foot of the comparables, more than offset for any deficiencies in Petitioner’s location even in light of the repairs needed to his home. Therefore, I find that the market value of the house is actually greater than $116,800.

CONCLUSIONS OF LAW

Based upon the above findings of fact, I conclude the following as a matter of law:

1. A taxpayer may appeal a property tax assessment determination of a county board of assessment by requesting a contested case hearing before the ALC. S.C. Code Ann. § 12-60-2540(A) (Supp. 2005). As the party contesting the assessing authority's valuation, the Petitioner has the burden of proving the actual value of the property at issue. See Reliance Ins. Co. v. Smith, 327 S.C. 528, 537, 489 S.E.2d 674, 679 (Ct. App. 1997). Thus, in this case, the Taxpayer has the burden of proving the value of their property should be $583,800.

2. 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 (Supp. 2005); Atkinson Dredging Company v. Thomas, 266 S.C. 361, 223 S.E. 2d 592 (1976).

3. Petitioner contends that the Assessor incorrectly valued his property. Relatedly, he contends that pursuant S.C. Code Ann. § 12-43-220 (Supp. 2005), his swimming pool which is located upon his property should not be considered as an amenity when evaluating the value of his property. Petitioner apparently is arguing that the use of the term “legal residence” infers that only the residence and not any amenities to the property can be included in the value of the property. However, Section 12-43-220 addresses classification of property that is assessed for taxes, not the means by which property is to be valued.^[4] Moreover, “[t]he interpretation of a term set forth in a statute should support the purpose of the statute and should not lead to an absurd result.” S.C. Coastal Council v. S.C. State Ethics Comm'n, 306 S.C. 41, 44, 410 S.E.2d 245, 247 (1991). “When considering the value of property by the willing-buyer, willing-seller standard. . . all relevant factors must be considered.” South Carolina Tax Commission v. South Carolina Tax Board of Review, 278 S.C. 556, 561, 299 S.E.2d 489, 492 (1983). Moreover, in Long Cove Home Owners' Ass'n, Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 488 S.E.2d 857 (1997), the Court even held that the proximity of a taxpayer’s property to amenities, such as lakes or golf courses may increase the value of the property.

S.C. Code Ann. § 12-37-930 (Supp. 2005) sets forth 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.

See also S.C. Const. Art. III § 29 (“All taxes upon property, real and personal, shall be laid upon the actual value of the property taxed.”). 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). Furthermore, 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).

“Appraisal is, of course, not an exact science and the precise weight to be given to any factor is necessarily a matter of judgment, for the court, in the light of the circumstances reflected by the evidence in the individual case.” Santee Oil Co. v. Cox, 265 S.C. 270, 277, 217 S.E.2d 789, 793 (1975). Generally, in determining the fair market price for 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).^[5] See also, Long Cove Home Owners' Ass'n, Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 488 S.E.2d 857 (1997) (“The ‘willing buyer/willing seller’ standard in [Section 12-37-930] is hypothetical in nature and may be assumed when no actual market exists for a particular parcel of land”); 84 C.J.S. Taxation § 512 (2001). Here, the evidence supports that the best approach to determining the fair market value of Petitioner’s property is using a market sales comparison approach. See Smith v. Newberry County Assessor, 350 S.C. 572, 567 S.E.2d 501 (Ct. App. 2002).

ORDER

Based upon the above Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that the Assessor value the Petitioners’ property for the tax year 2004 at $116,800.

AND IT IS SO ORDERED.

____________________________

Ralph King Anderson, III

Administrative Law Judge

July 12, 2006

Columbia, South Carolina