Property Assessment Overview
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The Code of Virginia requires that properties be assessed at fair market value. The Courts of the Commonwealth of Virginia have defined the fair market value of property as the price which it will bring when it is offered for sale by one who desires but is not obligated to sell it, and is bought by one who is under no necessity of having it. In addition to the code requirement, experts in the field of assessment administration advocate a full value because the results are more equitable and realistic and property owners can more easily understand an assessment when it conforms to the current market value of their property.
Fair Market Value Assessment
In order to determine the fair market value of properties within Newport News, a full time staff of experienced professional appraisers is employed by the Real Estate Assessor's Office. The appraisers possess or have the equivalent of a college degree in the valuation of real property. They must continue their education by completing courses in the use of the most current appraisal practices and techniques sponsored by the Appraisal Institute, International Association of Assessing Officers, Virginia Association of Assessing Officers, and the Virginia Department of Taxation.
Many have or are working toward professional designations by the Appraisal Institute and International Association of Assessing Officers. Although not a requirement for employment, many of the appraisers are licensed appraisers by the Commonwealth of Virginia.
Finding the Market Value
Finding the market value of a property involves discovering the price most people would pay for it in its present condition. It's not quite that simple, however, because the appraiser has to find what this value would be for every piece of property, no matter how big or how small. But it doesn't stop there. Each year they have to do the whole thing over again, since the market value may change from one year to the next.
The appraiser has not created the value; they simply have the legal responsibility to discover it as it exists and appraise your property accordingly, since people make value by their transactions in the market place.
The value of land and buildings is dependent upon many factors. Each class of property, and in most cases each individual parcel has to be valued separately. Properties are normally valued by using one or a combination of several different approaches to value.
To find the value of any piece of property the appraiser must first know what properties similar to it are selling for, what it would cost to replace it today and how much it takes to operate and keep it in repair, or what rent it may earn; many other factors affecting its value include the current rate of interest charged for borrowing the money to buy or build properties like it.
Determining Factors of Property Value
Utilizing these facts, the property's value may be determined in three different ways. The first way, the sales comparison approach, compares your property to others that have sold recently. These prices, however, must be analyzed very carefully to get the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry and would pay any price. Another may have sold for less money than it was actually worth because the owner needed cash right away and was willing to sell to the first buyer who made an offer.
Using this approach, comparing the selling prices of properties similar to yours, the appraiser must always consider such overpricing or under-pricing to arrive at a fair valuation of your property.
The second way to value property, the cost approach, is based on how much money it would require, at current material and labor costs, to replace the property with something similar. If the property is not new, a determination must be made as to how much it has depreciated.
The third way, the income approach, is to evaluate the amount of income the property would produce if it were rented, such as an apartment complex, a retail building, or an industrial property. The appraiser must also consider operating expenses, insurance, maintenance costs and the return most people would expect for that kind of property.
In arriving at an indication of the market value of a property, the appraiser may use one or several of the above three approaches to value, the market, cost and income approach. It is the appraiser's primary responsibility to find the fair market value of your property, so you pay only your fair share of the taxes.
Change of Assessment
During the required annual reassessment, when any change is made in the assessment of a property, the property owner is notified of such change in writing by the City Assessor. Upon notification of Change in Assessment, if your opinion of the value of your property differs from the appraiser's, by all means come in or call and discuss the matter with the appraiser assigned to your neighborhood. The appraiser will be glad to go over any questions you may have about your assessment.
Many times property owners are satisfied that their assessment is correct after speaking with their appraiser. If the information presented by the property owner indicates a review is warranted, the property will be inspected. The appraiser will schedule a visit and may request to inspect the interior of your home and/or request additional information. A change in the assessment can not be made until enough facts are known to make a decision concerning the value of the property.
The owner will be notified of any resulting change in assessment by the Real Estate Assessor's Office.
If your opinion of the value of your property still differs from the appraiser's, the next step in the appeal process is the Board of Review of Real Estate Assessments. This Board is comprised of three citizens appointed annually by the Circuit Court to hear and give consideration to appeals from property owners with regard to the equalization of real estate assessments.
If you are still not satisfied, you may file a petition with the Circuit Court of Newport News to formally consider your case concerning the assessment of your property.
The real estate tax is levied on all taxable properties in the city and generates part of the total city revenue. These tax funds are used to provide all the services the citizens of the City of Newport News enjoy such as police and fire protection, elementary and secondary education, recreation, public works, transportation, health, social services and libraries.
The sum of the monies needed each year, by the city agencies and departments, determines the tax rate. The tax rate is applied to your property's assessed value.
The City of Newport News offers several programs for the deferral or abatement of taxes for those homeowners at least 65 years of age or disabled property owners who meet certain conditions. Additional information concerning these programs may be obtained by contacting the Commissioner of the Revenue.