Property Revaluation and Taxes Explained

I was recently asked if property revaluations cause taxes to go up. A revaluation itself does not automatically raise taxes. Here are the steps in the process:

1. Property Revaluation

A property revaluation is when a county reassesses the market value of all real estate to make sure property values reflect current market conditions.

• This happens every 4 years in Cabarrus County

Example:

If your home was valued at $250,000 in the last revaluation but homes like yours are now selling for $350,000, your new assessed value will likely rise to reflect that.

 2. Tax Rate Adjustment

After the new property values are set, Harrisburg must decide on a new tax rate (measured in cents per $100 of property value).

Prior to the revaluation Harrisburg’s tax rate was 43.5 cents. If they left the rate as it the town would have received 100 % of the new home values and associated tax revenue. They opted to lower to 41 cents.

3. Revenue-Neutral Rate (disclosure required by NC Statute)

The revenue-neutral tax rate is the rate that would bring in the same total amount of tax revenue as before the revaluation.

The revenue neutral rate for Harrisburg post the revaluation was around 31 cents. This rate would have allowed our taxes to equal what it was prior. As stated above they dropped to 41 cents which ultimately becomes the equivalent of a 10 cent per 100 tax increase

If the town keeps the rate higher than revenue neutral, it’s effectively a tax increase — even if the “rate” looks lower than last year’s rate.