Whom the process hurts and helps

When you’re selling your house, a higher value is better for your bank account. When county government is deciding how much your house is worth for tax purposes, the exact opposite is true: the bigger the value, the higher the tax bill will be.

Here’s a look at how inequities in tax values result in inequities in taxes paid.

Jane and John Modest

Suppose the Modests own a home that would be worth $180,000 if sold on the open market. The goal of the reappraisal process is to give the home a value as close as possible to that figure, but Urban3’s research suggests the tax value Buncombe County assigned a home in that price range last year was only 82.3% of its market value. That would yield a tax value of $148,140.

At Buncombe’s current tax rate of 48.8 cents per $100 valuation, the Modests would owe $723 in county property taxes. (To make things simpler, these calculations exclude municipal and fire district taxes.) The discount incorporated in their property’s tax value means the Modests’ effective tax rate — the amount they pay divided by the true value of their home — is 40.2 cents per $100.

Arthur and Ann Bigbucks

The Bigbucks own a home that would bring $1 million if sold. Urban3’s numbers say the county gives expensive homes tax values farther below their true value, on a percentage basis, than it does inexpensive ones.

A million-dollar home’s tax value was 74.4% of its market value last year, Urban3 says. That would mean the Bigbucks’ home would be listed on the tax rolls at $744,000, yielding a tax bill of $3,631.

The Bigbucks’ effective tax rate is therefore only 36.3 cents per $100 valuation. While the Bigbucks’ total tax bill is much more than the Modests’, the Bigbucks are actually being taxed at a lower tax rate.

The race angle

Census data say homes owned by Black residents of Buncombe County are typically worth less than those owned by white people, says Ori Baber of Urban3. In turn, that suggests that unfairness in the property tax appraisal system hits Black families especially hard. Urban3 head Joe Minicozzi says disparities in the system today and in the past should be considered in the community’s conversation about reparations.

However, figures from a University of Chicago analysis of tax appraisal fairness in counties nationwide paint a less clear picture. In Buncombe County in 2019, some of the areas where tax values were closest to market values — places like Leicester, Sandy Mush, Alexander and suburban areas south of Asheville — also had some of the smaller percentages of residents of color in the county.

Baber says that 2019, the most recent year the UC analysis considers, may not be representative of Buncombe’s tax values over the past 20 years. But he concedes that it is difficult to accurately measure the racial impact of tax appraisals. Urban3 is currently working on an analysis he hopes will more accurately describe who’s been hurt and who has benefited.