Residents face property tax overpayments

By Michelle E. Shaw

The Atlanta Journal-Constitution

Metro Atlanta homeowners face overpaying property taxes by $420 million — more than last year — if assessments aren’t dramatically reduced, a non-profit housing group says in a report to be released today.

The fourth report in a series commissioned by the Atlanta Neighborhood Development Partnership, a housing developer and policy advocate, says valuation cuts made in 2009 were not enough to accurately reflect market price declines.

But saying values should be reduced is easier than actually lowering assessments, said Rodney McDaniel, Clayton County’s chief appraiser. Foreclosures and short sales distort the process, he said.

“It’s like you have two markets out there,” he said. “There’s the regular sale between two parties and then there are these bank deals and distressed deals that go for a much lower price. It is not easy figuring out what to do when you have such a broad spectrum of sale prices.”

Clayton plans to reassess several thousand residential properties this year, but the final number is yet to be determined, McDaniel said.

The Atlanta Journal-Constitution in December reported that tens of thousands of homes across metro Atlanta were overvalued last year by county tax assessors, who didn’t adjust values sufficiently after the real estate collapse. Homeowners, the newspaper reported, were being taxed on values their property no longer held.

ANDP released a report earlier this year showing how much homeowners in certain ZIP codes overpaid their property taxes. Its report today forecasts how much could be overpaid, and in some cases underpaid, on average if values are not adjusted further.

Prepared by Robert Charles Lesser & Co., the report breaks out the three ZIP codes with the most foreclosures in Clayton, Cobb, DeKalb, Fulton and Gwinnett counties. The study took sales values from the second half of 2009 and contrasted those numbers to the value the county set on the same property.

Analysts then calculated what the tax assessment could be based on sales figures, compared to 2009 assessments on the same properties.

That methodology is one of the problems with the study, said Steve Pruitt, chief appraiser for Gwinnett County. He said his office expects to send more than 140,000 reassessment notices to homeowners.

“They work off of ZIP codes and I work off of neighborhoods and a neighborhood for me may be 20 ZIP codes,” he said. “I have to look at a much larger concentration of homes.”

John O’Callaghan, ANDP president, said the trend holds even if ZIP codes are grouped.

“What we have done is a cautionary to measure to warn county assessors of what could happen,” he said.

In 2009, homeowners in the 15 ZIP codes with the most foreclosures had an average overpayment of $491, according to ANDP. This year, with one ZIP code change in Cobb, DeKalb and Fulton counties, the potential average overpayment is $753 per homeowner, if values aren’t lowered further. Here are the ZIPs and the total potential overpayment in each:

Clayton: 30238, 30274 and 30296, $23 million.

Cobb: 30168, 30127, and 30106, $12 million.

DeKalb: 30038, 30058 and 30294, $28 million.

Fulton: 30310, 30349 and 30331, $34 million.

Gwinnett: 30039, 30045 and 30044, $33 million.

Those ZIPs account for 21 percent of homeowners in core metro counties but 30 percent of the potential overpayments, the report says.

Elliott and Heather Brown, who live in Fulton County’s 30349, bought their home in 2008 for $150,000 less than the original list price. It is now worth $45,000 less than what they paid, Elliott Brown said.

“We had an appraisal done when we refinanced our loan and found out our value had dropped even further,” he said. “So since our original tax bill was based on the original list price, I have no hope that this year’s tax bill will be realistic.”

He said he filed a return with the Fulton County assessor’s office and hopes to get some relief that way.

“I’m just not sure what to expect, though,” he said. “There seems to be no rhyme or reason to this process.”