Taxes – A Fact of Life in NW Arkansas as Elsewhere

Just as the deadline for filing income taxes passed, counties started mailing out property tax bills for real estate and personal property. Individuals as well as businesses are subject to property tax.

There are a few changes this year – designed to make paying taxes a bit easier. The deadline has been October 10th for several years. The state legislature decided that changing the deadline to October 15th would help people remember it better. We all have April 15th imprinted on our brains so I guess now we can add another permanent mark there for October 15th.

The other change allows owners to pay their taxes in installments. People can pay any or all tax due at any time between the first business day in March and October 15th. There is no limit to the number of payments that can be made. This is helpful for people who would rather pay as they go, perhaps monthly, than to be hit with the whole amount due at one time.

Arkansas has a couple of quirks in its tax code and these sometimes cause problems for new residents and even some large businesses with home offices elsewhere.

For example, property owners must call or visit the appropriate county assessor each year between January 2 and May 31. At that time, they “assess” their property – meaning to make it known to the assessor that they own or lease items subject to tax. A wide range of items is considered taxable – cars, trucks, boats, office equipment and furniture, warehouse and manufacturing equipment, and most everything else a business uses. Individuals will soon discover they cannot register their car until it has been assessed.

But there are also quirks that prove highly beneficial to property owners who own the house they live in. Owner/occupiers receive a credit each year of up to the first $350 of property tax.

The other big benefit freezes appraised values of residences where at least one owner is either disabled or over age of 65. Completion of a simple form through the assessor’s office is all that’s required. The freeze results in a property tax that cannot increase due to a higher assessed valuation. The tax can increase only if improvements are made to the property or the millage rate increases.

Disabled veterans can sometimes qualify for no property tax on their residence. This depends on the degree of disability as certified by the Veterans Administration.

And, one more date to remember. July is the usual time of year that people can file protests to their tax bills. Just check with the appropriate county assessor to find out the procedure.

Real Estate News in NW Arkansas

Now that I’m reading the local newspaper on line again, I can use it to help my readers find information on news and issues of importance for the area.

With regard to real estate there are a few things.

First, an article Saturday in the new NW Arkansas paper provided good information about the housing market in NW Arkansas in relation to property taxes collected and delinquent taxes. It seems that the sum of delinquent taxes declined last year, but that doesn’t necessarily mean that the housing market is improving.

Second, last Friday was the annual Economic Forecast Luncheon at the Hammons Center in Rogers, sponsored by the Center for Business and Economic Research at the U of A Sam Walton School of Business.

We learned about recent occurrences in the world, national and local economy and postulations about what’s coming in the near future. Actually the outlook was more positive than I would have imagined and I hope the crystal balls of the speakers are not cracked or broken. We need some positive economic news to get buyers out into the streets again, purchasing homes.

The economic stimulus measures of the federal government have helped, particularly the first time home buyer tax credit, which was expanded and extended into this year. Now if only the weather would improve… ;-)

The other event which I just found out about at the Metro Board of Realtor Luncheon on Thursday was the imminent merger between two of the large local real estate companies of NW Arkansas, Harris McHaney and Coldwell Banker Faucette Realty. This will make the largest real estate company in the NW Arkansas area.

This comes on the heels of the merger under the Weichert umbrella of the Griffin Company and Weichert Clark Long and Associates in December just before Christmas.

The real estate business in NW Arkansas is a changin’. Small boutique firms (and even larger firms like Griffin and Harris McHaney) are having a tougher time. The housing market has suffered with the recession, and may continue to do so. The recent announcement by Walmart of laying off 300 people here in NW Arkansas may have a chilling effect on the economy and housing market just as Walmart’s layoff of 800 people last year did.

Foreclosures are high and there are a lot of short sales. With some of our major corporate employers also cutting back, growth in the area is bound to be curtailed, compared to the peak a few years ago. This (in turn) will lead to fewer new homes being built and sold at a time when we are still trying to absorb the inflated inventory of homes from our mini housing bubble.

I certainly don’t have a crystal ball, but I’m still optimistic.

For more info on the housing market and property taxes:
http://www.nwaonline.com/news/2010/feb/06/unpaid-real-estate-taxes-dip-20100206/

For more info on the Economic Forecast Luncheon and the economy:
http://www.nwaonline.com/news/2010/feb/06/green-jobs-sustainability-could-boost-area-economy/
http://tinyurl.com/ygyzk98
http://tinyurl.com/yzqehch

For more info on the merger of Coldwell Banker and Harris McHaney:
http://www.arkansasbusiness.com/article.aspx?aID=120146.54928.132287

For more info about Fayetteville and NW Arkansas and purchasing or selling a home there:
http://www.JudyLuna.com

And for searching the NW Arkansas MLS:
http://www.NWArkansasHomeSearch.com

Benton County Property Taxes Lowered for Some

Benton County has lowered values on some residential real estate by more than $2.5 million dollars. That means about 38,000 people will see their tax bills lowered for 2009. Note that 2008 taxes, which must be paid in full by October 10, 2009 will not be affected.

The move was a result of a report by an independent appraiser that Benton County had hired due to the public outcry on reassessments. The adjustments were limited to residences in towns and cities, not business or commercial properties or rural residences, since the majority of devaluations were residential properties located in cities, according to the report.

The county is under no obligation to send notices of the adjustments to owners via U.S. Mail. To find out if your property is affected, you need to go online http://www.co.benton.ar.us/BentonCountyNews.aspx?id=22 and fill out a short form.

If you wish to appeal the assessment on your home, you need to contact the Benton County Assessor at 479-271-1000 between July 20 and August 17 to make an appointment with the board of equalization.

Washington County property owners take heart. The county assessor is seeking permission to begin a similar process. If she receives the go-ahead, it’s possible homeowners and landlords may see tax relief next year.

You can call the Washington County Assessor’s Office now at 479-444-1500 if you wish to appeal the appraised value on your property.

For more information:

http://www.nwaonline.net/articles/2009/07/08/news/070909bzequalization.txt

Benton County Property Appraisals - The Saga Continues

Don’t lose this phone number: 479-271-1037. If you can get through the busy signals, it will connect you to the Benton County Assessor’s office where you can make an appointment to meet with the Equalization Board if you feel your property has been assessed too high.

Property owners who are unable to get through to the Assessor's may stop by the office in the Benton County Administration Building, fax a letter of request to (479 ) 271-1073 or mail a letter to the attention of Cathy Lee, scheduler for the Equalization Board, 215 E. Central Ave., Bentonville, AR 72712.

All letters requesting an appointment with the board should include the property owner's name, address, phone number and parcel number. If residents chose to mail a letter requesting a meeting, they should send the letter via certified mail.

Keep in mind you must contact the assessor’s office before August 20. The board will meet from August 1 to October 1 to hear why you believe your property value is incorrect. Bring along some evidence such as an independent appraisal of the property or a new mortgage on the property.

The board can adjust the property values for three reasons:
--The assessment is unfair compared with other lands of the same kind, similarly situated.
--It is appraised higher than neighboring properties with the same uses, size, materials and conditions.
--The assessment is clearly erroneous.
--The assessment is manifestly excessive.

On the one hand, we can’t point too hard at the assessor’s office for the high numbers. Assessments must be done every third year but it takes time to assess all the parcels. People must go out and physically inspect the properties. Things were still flying high during much of 2007 when the appraisals were being conducted. It was late 2007 and into 2008 when things started spiraling downhill.

On the other hand, however, I was distressed to read that when one property value has been readjusted, all similarly situated property should automatically be re-examined and that part of the law has been ignored.

Many Benton County residents have become galvanized to fight the increased appraisals. On Monday night the NW Arkansas Property Rights Association hosted a town meeting to inform residents of their rights and to help them get some answers. Present at the meeting were County Assessor Bill Moutray; Sen. Kim Hendren, R-Gravette; Larry Kelly, a local real-estate agent; Benton County Appraiser Charles Hudson Jr.; and Benton County Clerk Mary Lou Slinkard.

Now that property owner’s concerns are being brought to the forefront, Benton County officials will hopefully be taking a more proactive approach to protecting owner’s rights.

For more information:

My blog postings dated July 12 and July 29 - http://nwarealestateblog.blogspot.com/

http://nwanews.com:80/bcdr/News/64125/
http://nwanews.com/bcdr/News/64436/

Benton County Reappraisal Process is Complete

I no sooner posted the article (see blog posted July 12) than Benton County completed its appraisal process for property taxes.

Values are up – way up in some cases – and people are not happy. The total value of property in Benton County’ increased from $2.9 billion in 2005 to more than $4 billion this year. That includes increases in value of existing properties as well as new construction.

What many folks haven’t taken in to consideration is the fact that the last reappraisal was in 2005 and values have certainly risen since then, although not at the double-digit rates of the past several years. Instead, they seem to be looking only at the past year or so when values started coming down from their all-time high.

There is so much bad news these days it’s easy to get caught up in the doom and gloom. However, NW Arkansas is still growing and adding jobs, though not as rapidly as in the past.

As I’ve said before, real estate is local. You can’t look at California (or Florida or Nevada), for instance, and assume the same thing is happening here.

Arkansas law does provide important benefits to homeowners.

The increase in assessed value on a person’s homestead is capped at 5% per year. Thus, if the assessed valuation of the owner’s personal residence increased 9% over 2005 value, the 2009 value would be capped at 5%. It would be 2010 before the remaining 4% took effect.

Another advantage helps homeowners age 65 or older and those considered disabled as defined by Social Security Administration. It prevents the taxable assessment on an owner’s personal residence from ever increasing due to a reappraisal. Taxes can go up if improvements are made to the property or if millage rates go up, but not because of periodic increase in value.

In other words, all you have to do is notify the county assessor once you reach age 65 or become disabled and your taxable assessed valuation will be frozen forever (at least as long as you live in the same house).

(I’ve included below links to the application forms for both Benton and Washington counties.)

The new assessments will take effect January 1, 2009 with taxes due October 10, 2009.

Taxpayers can appeal the new valuation to the Benton County Equalization Board. You must make an appointment before August 20.

For more information:

Benton County Assessor’s office: 479-271-1037

http://www.nwanews.com:80/adg/News/231396/

http://www.co.benton.ar.us/Assessor/HomesteadApp.pdf

http://www.co.washington.ar.us/Assessor/Am79.htm