ORDERS:
FINAL DECISION
STATEMENT OF THE CASE
This is a contested case brought by the Petitioners, William and Sherry Perry, concerning a
property valuation for the 1996 tax year. The Petitioners exhausted their prehearing remedies with
the Assessor and the Aiken County Board of Assessment Appeals ("Board") and are now seeking
a contested case hearing before the Administrative Law Judge Division. A hearing was held at the
office of the Administrative Law Judge Division ("ALJD") on December 9, 1997.
ISSUE
What is the appropriate market value for tax year 1996 of a parcel of real property located in Aiken
County, South Carolina, with structures and improvements thereon?
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 subject property is located on the North side of the City of Aiken at 1463 Edgefield
Road. Upon the property is a two-story single family dwelling encompassing approximately 9,172
square feet of living area. The house has a brick veneer exterior, wood shingling on the roof, and
is equipped with central heating and air, a three-car garage, porches, a patio, a basement with about
4,696 square feet, two fireplaces, a Jacuzzi, and a wet bar. There are also a driveway and a
brick/iron fence with gates on the subject property.
3. The Respondent, Aiken County Assessor, initially submitted an Appraisal Report indicating
the market value of the subject property as of December 4, 1996 to be $550,000. This appraisal was
arrived at by comparing the subject property with other properties in Aiken County, two of which
are in the Woodside Plantation and one of which is located in Kalmia Hills. These comparable
properties were located on the South side of Aiken.
Afterwards, the Petitioners employed Ms. Kim Cato to perform an appraisal on their behalf.
In Ms. Cato's opinion the subject property had a market value of $380,000 as of December 12, 1996.
Ms. Cato opined that the Respondent's use of the comparable properties was improper because these
properties were located in superior subdivisions, and she further believed that the subject property
required a 20% economic depreciation due to it being an extreme over improvement for its area,
along with a physical depreciation of 12% based on the subject property's age of seven years.
4. Petitioners appealed the Respondent's findings to the Aiken County Tax Review Board, and
that body determined on May 20, 1997 that the Respondent's valuation of the subject property
should be lowered to $523,200 due to a 15% economic depression of the area.
5. The Petitioner argues that the market value for the subject property is $380,000 rather than
the Respondent's valuation of $550,000. The Petitioners presented the testimony and appraisal of
Ms. Kim Cato, the appraisal of the Respondent, and numerous photographs of the subject property
and its surrounding area.
6. Because of the location of the subject property and the size of the Petitioners' home, there
are no properties in the area that are adequately comparable. Therefore, I find that the proper
approach to arrive at a value for the subject property is the cost approach.
7. The Petitioners argue that the subject property should be valued using the cost approach as
follows:
House 9172 sq.ft. x $50.00 $458,600.00
Unfinished Basement 4696 sq.ft. x $11.00 $ 51,656.00
Attached Garage 924 sq.ft. x $20.00 $ 18,480.00
Porches, Patios $ 6,500.00
Jacuzzi, Wet Bar $ 4,000.00
Brick/Iron Fence w/ 2 Iron Gates (1350 linear ft.) $ 8,000.00
Landscaping, concrete drive/walk, septic tank $ 4,500.00
VALUE OF IMPROVEMENTS BEFORE DEPRECIATION $551,736.00
Less 12% Physical Depreciation and 20% Economic Depreciation $176,556.00
VALUE OF IMPROVEMENTS AFTER DEPRECIATION $375,180.00
Plus the Land (1.10 acres) $ 5,000.00
INDICATED VALUE BY COST APPROACH $380,180.00
8. The Respondent argues that the subject property should be valued as follows using the cost
approach:
Dwelling 9172 sq.ft. x $49.50 $454,014.00
Basement 4696 sq.ft. x $11.00 $ 51,656.00
Two Fireplaces, Jacuzzi, Wet Bar $ 10,000.00
Garage 925 sq. ft. x $20.50 $ 18,963.00
TOTAL COST ESTIMATED NEW $534,633.00
Less Physical Depreciation $ 21,385.00
Less External Depreciation $ 53,463.00
DEPRECIATED VALUE OF IMPROVEMENTS $459,785.00
"As-is" Value of Site Improvements $ 63,360.00
INDICATED VALUE BY COST APPROACH $538,145.00
9. The Petitioners' home's effective age is approximately seven years. They built this 9,172
square foot home in a area in which the average home is approximately 1000 square feet. Given the
size of the Petitioners' home as compared with other homes in the area, it is over improvement for
the area or a "super adequacy." As such, the value of the property is entitled to an adjustment of 20%
due to economic obsolescence. In addition, the proper valuation of the Petitioner's fence should be
based upon the Marshall Swift data utilizing the measurement of 14,322 square feet. Therefore, I find
that the subject property should be valued, using the cost approach, as follows:
House 9172 sq. ft. x $50.00 $458,600.00
Unfinished Basement 4696 sq. ft. x $11.00 $ 51,656.00
Garage 924 sq. ft. x $20.00 $ 18,480.00
Porches, Patio $ 6,500.00
Jacuzzi, Wet Bar $ 4,000.00
Brick/Iron Fence w/gates $ 58,800.00
Landscaping, Concrete Driveway, Etc. $ 4,500.00
Less 10% physical depreciation $ 60,254.00
20% economic obsolescence $120,507.00
Plus Land Value $ 8,000.00
VALUE BY COST APPROACH $429,775.00
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 (Supp. 1995) 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, 232 S.E.2d 592
(1976).
2. In S.C. Code Ann. § 12-37-930 (Supp. 1995) 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.
3. An assessor's valuation is presumed correct with the burden being on the property owner to
disprove the assessor's determination. 84 C.J.S. Taxation § 410 (1954). It is the burden of the
taxpayer contesting an assessment to show that the valuation of the taxing authority is incorrect.
Ordinarily, this would be 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. Clovd
v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988).
4. I conclude that the cost approach in arriving at the market value of the subject property is the
correct approach, and that the market value of the property is $429,775.00.
ORDER
Based upon the Findings of Fact and Conclusions of Law, It is hereby:
ORDERED that the Assessor value Petitioners' property based upon the cost approach for
tax year 1996 at $429,775.00.
AND IT IS SO ORDERED.
Ralph King Anderson, III
Administrative Law Judge
Columbia, South Carolina
February 12, 1998 |