Clearing the Air about Property Revaluations: Tax Value x Tax Rate = Tax Bill

Posted on March 10, 2023

In North Carolina, the Tax Burden on property owners is comprised of two variables. The Tax value x The Tax Rate = Tax Bill. You most likely received a letter in the mail within the past week from Rutherford County, which included a Tax Revaluation notice. This news shook the county, as everyone saw a large increase in property values. In Rutherfordton, values have increased across the board by a whopping 45% (you read that right). This value increase is simply market driven based on comparable sales of homes and properties, but it’s not just happening here. It’s happening across our state, as it is a culmination of a lack of real estate options. New housing starts have decreased and the demand has increased beyond our control. We lack over 500 housing units in our town, and waitlists are getting longer with people willing to pay more. We are actively working with the Redevelopment Commission and Gateway Wellness Foundation to increase access to quality housing. Until we see more inventory of housing options, supply and demand will continue to drive up home prices.

We’d like to make one thing clear: while your tax value increased by 45%, we expect that tax rates will decrease significantly to help offset the higher values. The Town of Rutherfordton is currently doing “Revenue Neutral” exercises that calculate what the tax rate would be to generate the same revenue with the higher values. We will publish more information about this as we complete this process, and share more information about our FY24 budget as it is compiled. We want to balance a low tax rate for our citizens and providing excellent service delivery, including keeping critical public services and safety positions filled. We understand that none of these points takes the sting out of the value, but it’s the culmination of the housing market and economy that is making it happen.

To break this down in another way, we see eggs selling for $6 a dozen. While some can’t justify that high cost, we still see people paying more for a dozen eggs which is driving up the prices. Value is just one side of the coin, but the tax rate is what determines the final bill.

In Rutherfordton, the Town Staff and Town Council are working proactively to plan for the future, to set goals as seen in the 2023 Action Plan, and meeting now in advance of the upcoming budget to plan for needs to determine the new tax rate based on these values. We take the tax burden seriously and that the Town of Rutherfordton’s budget process begins with your input on services, projects, and needs of the community. We have a wonderful staff working to serve you each day. While the value of your home has gone up, the Town’s mission through this process is to ensure you receive a fair tax bill for the quality services that make Rutherfordton an excellent place to call home.

We’d like to share additional resources about other communities and their increased property revaluations:

Ashe County was 43.5%

Iredell County was 42%

Macon County was 57%

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