Will My Tax Bill Change?
Not necessarily. The annual tax bill for each property is calculated by multiplying the tax value by the tax rate, which is determined each year by each taxing jurisdiction—the county commissioners, city council, fire districts, etc. Some tax bills will go up, some will go down, and some will stay about the same.
How Reappraisal Works
To accomplish the task of valuing all parcels within the county as of the January 1 reappraisal date, the methodology of mass appraisal must be utilized.
We examine every recorded sale of property in the county, review building cost data, and gather income/expense information from income-producing properties. These data sources assist us in developing schedules, standards, rules, tables and other factors used to apply the correct appraised value to over 125,000 individual properties, even though they may be of different types and locations.
Mass appraisal methods and processes are like the techniques used by single-property appraisers, but they follow a different set of appraisal industry standards, since they are designed to predict market values for groups of properties rather than an individual property.
For the 2025 reappraisal, every property in Durham County will be reviewed through a combination of computer-based and field reviews to ensure property characteristics are reflected accurately in the county tax records.
What Does “Market Value” Mean?
North Carolina General Statute 105-283 defines market value as follows:
“the price estimated in terms of money at which the property would change hands between a willing and financially able buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of all the uses to which the property is adapted and for which it is capable of being used.”
Another way to say it is that market transactions are those that happen at “arm’s length,” or situations where buyers and sellers are reasonably informed, acting in their own best interests, and under no pressure to buy or sell.
What Market Value is not
There are many types of transactions that do not generally meet the market value standard. Examples of transactions that must be carefully analyzed to determine if they can be qualified as a market sale include:
- Sales that occur as the result of a foreclosure
- Auction or Estate sales
- Sales between related parties, and
- Sales involving exempt institutions
Similarly, there are other meanings of the term “value” that are usually not the same as market value. Insured value, salvage value, present use value, book value, or actual construction cost must be compared to the market value definition to determine whether they are indications of market value.
Is Market Value the Same as Sale Price?
Individual transactions, even if they are “arm’s length,” do not necessarily occur exactly at the expected market rate. Since every combination of buyer, seller, and property is unique, there will normally be factors that cause the price for a particular transaction to be higher or lower than what the market would predict.
Put another way, some deals are better or worse than others. Our appraisers examine the market and compare an individual transaction to similar transactions. Regardless of the terms of a single sale, lease, or building cost, every property must be evaluated in terms of what is reasonable and typical in the market for the property type and location.
How is My Tax Value Determined?
Market value is not determined by the tax office; rather, it is determined by the actual activity in the local market. Appraisers examine and analyze market activity to develop formulas for establishing the values of property groups.
For example, although not all properties will sell, or rent, or be built at the same time, information from market sales can be used to establish typical market rates. The rates can then be applied to all properties to ensure fair and equitable values are assigned to individual properties.