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Commissioner of Revenue - Real Estate

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1. Why is real property assessed and reassessed?

The Office of the Commissioner of the Revenue is responsible for administering all the County’s ad valorem taxes. An ad valorem tax is simply a tax based on the value of the taxable item. Real estate is the best example of an ad valorem tax. Virginia Code §58.1-3201 states: All real estate, except that exempted by law, shall be subject to such annual taxation as may be prescribed by law. All general reassessments or annual assessments, in those localities which have annual assessments of real estate, shall be made at 100% fair market value.

2. Why tax real property?

When you call the police or Fire Department, play in a park, send your children to public school, check out a book at the library, or eat at an inspected restaurant, you are using services paid for by your property taxes. Your taxes also pay for services to help people move from welfare to work, protect children and senior citizens from abuse and neglect, protect our water and air from pollution, repair and build roads, and much more. Property taxes are the largest source of local revenue to fund these services that you count on every day. For more information about Rockingham County's budget and the services funded by your property taxes, visit the Rockingham County website.

3. What real property is taxable?

All real property in Rockingham County is subject to taxation, except properties that are specifically exempt under Article X § 6 of the Constitution of Virginia; or property classified or designated as exempt under Section 58.1-3600 of the Code of Virginia; property owned by the County, state, or federal governments; and property used for religious, charitable, educational, cultural, or recreational uses which are considered non-taxable. Properties may also be subject to exemption by County designation.

4. When are assessments effective?

Property is assessed as of January 1 of each year. The tax rate is set by the Board of Supervisors as part of the budget process during the 2nd Quarter of the year. This occurs after the County's budgetary needs are reviewed and after public hearings have been held. The real property tax is part of a well-balanced revenue system that enables County residents to share in the cost of police and fire protection, public education, parks and recreation, and other services.

5. What is General Reassessment?

The Code of Virginia mandates that all real property be assessed for taxation purposes at 100% of market value and be fair and equitable.  Localities the size of Rockingham County are required by the Code of Virginia to conduct a reassessment a minimum of every four years.  A reassessment is a systematic review of all property in the county to determine a fair market value.  For Rockingham County the process includes exterior inspections of real property by staff assessors, as well as leaving questionnaires for property owners requesting information as needed about the interior of the buildings and the condition of the property.  Sales information for real property sold in Rockingham County is reviewed and a sales ratio analysis is performed by staff assessors to determine fair market value.

During a reassessment, all property values are examined and adjustments are made on individual properties where necessary based upon the above process.  This is done to achieve a fair and equitable distribution of real estate taxes.  Once this process is complete, reassessment notices are mailed to property owners reporting the new assessed values individually for both land and buildings.  Should the property owner(s) believe their assessment is incorrect, they may request an informal appeal with staff assessors.  The request must be made during the window of time noted on the reassessment notice.

If, after the informal appeal, the owner still disagrees with the assessed value, the owner may then request a formal appeal to the Board of Equalization which is an independent group of citizens appointed by the Circuit Court of Rockingham County.  During the appeal process the Board of Equalization may reduce the assessed value, increase the assessed value or affirm the assessed value established during the reassessment process.  If the owner is still in disagreement with the assessed value after the appeal to the Board of Equalization, the next level of appeals is directly to the Circuit Court of Rockingham County.

6. How will this effect my taxes?

General reassessments are not designed to be a county-wide tax increase. This process is intended to align each property’s value with its current market value. Thus, the tax burden is more fairly and equally spread among all property owners. The law ensures that a general reassessment cannot be blamed for an increase in taxes. Once the reassessment is complete, state law requires that the tax rate be adjusted and equalized to render the revenue-neutral.

It is the responsibility of the Board of Supervisors to determine the budgetary needs of the County and the tax rate necessary to effectively meet those needs. If deemed necessary, the Board may propose a tax rate that generates more than 101% of the previous year’s tax revenue by advertising and conducting a public hearing separate from the annual budget meeting.

7. Who conducts the general reassessment?

Rockingham County conducted in-house General Reassessment from 1998 to 2018.  The 2022 General Reassessment was conducted by Pearson’s Appraisal Service, Inc.

 

8. If my taxes are paid through my mortgage escrow, do I have to do anything with this new assessment?

Yes. You should notify your mortgage company of your new assessment. Ask that they adjust your escrow account accordingly. Otherwise, your mortgage company will not be notified of any change in your tax amount until they receive the next tax bill. This could create a shortfall in your escrow account balance, potentially affecting your mortgage payment.

9. Why must real estate be taxed at fair market value?

Assessing all real estate at fair market value assures all property owners are assessed fairly and equitably.

10. What is exactly is “market value?”

The Virginia Supreme Court has provided the following definition of fair market value: The fair market value of a property is the price which it will bring when it is offered for sale by one who desires, but is not obliged, to sell it, and is bought by one who is under no necessity of having it.

11. Why have I received a notice of assessment change?

In accordance with Section 58.1-3330 of the Code of Virginia, you are provided a notice as an official statement of the assessed value of your real property for local tax purposes if your value has change 1% or more. The real estate assessment represents the estimated fair market value of your property. This notice is not a tax bill. The assessed value provides the basis for your real estate taxes that will be due on June 5 and December 5 annually.

12. Why is my assessment changing?

There are many reasons for a change in property value. The most obvious reason is that real property usually appreciates in value over time and the purpose of a general reassessment is to measure that change and update the fair market value. Value changes can also be created by additions, alterations, or demolitions. The real estate market is in constant change. Every sale, parcel map change or structure improvement is recorded and used to determine change in the fair market value of the real estate market. Even though market value changes all the time, the assessed value is not changed until the next general reassessment. The appraiser in charge of analyzing data for a general reassessment does not create the value. Citizens establish value by buying and selling real estate in the open market. The assessor’s legal responsibility is to determine the fair market value of the property and to insure uniformity and equity amongst all properties.

13. Is there a law that prevents assessments from changing more than a certain amount?

The Constitution of Virginia requires real estate assessments to represent fair market value. There is no provision to limit the amount of change from one reassessment cycle to the next reassessment cycle (4 year period).

14. How can a property be assessed for more than its purchase price?

Real estate may be assessed for more than the purchase price because the assessment reflects "fair market value." Fair market value is not necessarily the price paid for a piece of real estate, but rather, what it is worth on the real estate market at the date of measurement. Since the market value is determined at a place in time, market value continues to change after a sale takes place. Values also change, and the property value may have gone up since the purchase. This is especially true if a piece of real estate was purchased several years ago, or if a person happened to get a good buy because of a distress sale condition. Assessed value should represent fair market value at the time of the reassessment, which may or may not be the same as purchase price or a real estate sales price.

15. What is a home site and how is it valued?

A “Home Site” or “House Site” is all or part of a parcel that is best suited for single family residential construction. Applying the concept of “highest and best use”, this part of the land parcel is worth significantly more than the residual acreage.

16. Why is my three acre tract valued at a higher rate per acre than my neighbor who has fifty acres?

The supply and demand of small acreage parcels vs. large acreage parcels greatly differs . This can be due to many different reasons. Maintenance, financing, necessity are a few but the reasons are vary from purchaser to purchaser.

17. I live in a manufactured “mobile” home, what is the “Improvement Value” that I am taxed for?

Manufactured homes are taxed as personal property unless they have been converted over to real estate through a formal application process by the Clerk of the Court. Prior to conversion, anyone who owns their own land and places a manufactured home on it will receive a real estate bill for the assessed value of the land and any improvements i.e. porches, decks, paved driveways, outbuildings, etc. The land and improvements are taxed as real estate, and the manufactured home is billed separately as personal property.

18. How can you tax an outbuilding that has no electricity and is not livable?

The assessed improvement value is the sum of the value of all the structures on your property. Outbuildings such as sheds, barns, and detached garages add functionality and utility to your property, thereby increasing the market value of your parcel.

19. My house is under construction and only partially complete. Why are you not waiting until it is complete to assess me?

New construction that is not fit for occupancy can be assessed at its value reflecting the percentage of completion (e.g. 50%, 75%, etc.) effective January 1st of the tax year. When the new construction is substantially completed and/or fit for use it is picked up at 100% assessment for the remaining months of the year

20. If I no longer own this property, what should I do with the notice?

§58.1-3330 (c) of the Code of Virginia requires you to forward the notice to the new property owner.

21. Explain the differences between sales price, appraisals, and assessments.

Sale price is the actual price a buyer pays for a particular property.

An appraisal is a detailed single property valuation, and may be obtained any time throughout the year. Appraisals can have a variety of purposes, e.g. mortgage loan, sale, home equity loan, and estate valuations. The County does not do individual appraisals of this type.

An assessment is a mass appraisal of all property within a locality as of January 1 of the reassessment year for tax purposes. Assessments are based on large numbers of sales that are analyzed to determine values for large groups of similar properties.

22. Can I obtain a copy of my real estate assessment card?

Yes, real estate records are public records and can be obtained through the office of the commissioner of the revenue.

23. How is real estate tax calculated?

The 2021 tax rate is $0.74 per $100 of assessed value. To compute the real estate tax on a property assessed at $100,000, divide the assessed value by 100 and multiply by the tax rate: ($100,000 ÷ 100) x $0.74 = $740.00