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HBA
wants county to change home assessment
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by Kim
Fickett
Landmark reporter
A report performed by Shaner Appraisals
Inc. and commissioned by the Home Builders Association
of Greater Kansas City (HBA) has reviewed Platte County’s
current assessment procedure for new homes under construction.
At a meeting of area HBA members on Thursday
afternoon, HBA Director of Governmental Affairs-Missouri
Fred C. Buckley III presented a news release that indicated
the county’s assessment policy poses a tax revenue
loss.
“A review of Platte County’s
partial-completion property value assessment procedure
for new homes under construction shows the county may
be losing tax revenue, discouraging housing production
and providing some homeowners with up to a year of tax-free
living,” states the study.
The report found that under the current
system, home builders time their construction cycles to
avoid higher taxes and discourage speculative construction
in the county. It is estimated that the county receives
approximately $2.1 million in property taxes from new-home
construction.
Under Platte County’s current partial-completion
assessment model, the county currently values all property
on Jan. 1 and uses a 50 percent completion barrier for
determining property taxes for the entire year. Homes
less than 50 percent complete pay no property taxes on
improvements while homes over 50 percent complete pay
a pro-rated share of estimated taxes.
Due to this system, the study revealed
that a “leakage” in the tax collection system
leads to a loss in property tax revenue and also poses
a significant inventory tax burden on home builders.
If Platte County would opt to move to
the traditional occupancy-based system, which assesses
property taxes when a new-home buyer takes possession,
the study concluded the county would collect an estimated
$2.64 million in tax revenue and would eliminate barriers
to speculative construction by home builders.
If there was an increase of just five
percent in new-home construction, it would generate the
county $2.77 million in tax revenue, an addition of $130,000
for county services from just 30 additional homes.
Under the Missouri Revised Statutes, Section
137.082, it states the county assessor may consider a
property residentially occupied upon personal verification
of when any two of the following conditions have been
met:
• An occupancy permit has been issued
for the property;
• A deed transferring ownership from
one party to another has been filed with the recorder
of deeds’ office subsequent to the date of the first
permanent utility service;
• A utility company providing service
in the county has verified a transfer of service for property
from one party to another;
• The person or persons occupying
the newly constructed property has registered a change
of address with any local, state or federal governmental
office or agency.
It was reported at the meeting that in
discussions with Platte County Assessor Lisa Pope, she
said if the new model would be implemented her office
would need to employ an additional four employees.
However, according to Clay County Eastern
Commissioner Craig Porter, the change would not create
a hardship on the assessor’s office.
According to Porter, if Platte County
issues 600 building permits a year and 500 of those are
single family permits and if the county has 200 work days
a year, it would equate to a person working on 2.5 permits
per day on average.
State Certified General Appraiser for
Missouri, H. Laird Goldsborough said, “Lisa’s
biggest concern is the addition of staff because they
would have to determine occupancy. Even if the staff would
need to be added, the revenue would far outweigh that.
“It’s as simple as a phone call
to the recorder of deed’s office, or the utility
company. It’s just a matter of picking up the phone.”
Pope, who was asked to comment on Monday
said, “I don’t have any comment on it right
now. I’m just kind of leaving it up to whatever happens
right now.”
According to the study, the change to
an occupancy-based assessment model would also shift the
majority of the tax burden directly to new homebuyers
who benefit from the services provided by the taxes.
Currently, a homeowner buying a home less
than 50 percent complete on Jan. 1 can live in the home
much of the year virtually tax free while a homeowner
purchasing a home that was more than 50 percent complete
on Jan. 1 will pay a higher price for the home due to
taxes assessed while the home was in inventory.
“The report recommends the occupancy
model as it better allocates the costs of the services
to the users of those services, resulting in a more fair
tax collection system,” said HBA Executive Vice President/CEO
Tim Underwood.
“The change would allow the county
to collect more tax revenue more quickly while eliminating
what builders consider an inventory tax.”
The change, is also stated, that it would
eliminate the potential errors that are possible under
the partial-assessment system.
Under the partial-assessment model, county
employees must determine if a home under construction
will be 50 percent complete and ready for assessment by
Jan. 1.
If they have not inspected the under-construction
inventory for some time, their assessment can be arbitrary
as to the level of the finish. The value is also based
on the assumption that a home would sell in that condition
on that day, meaning there may be a substantial discount
for the buyer to assume ownership of an unfinished home
and then finish construction.
Second District Commissioner Jim Plunkett,
who was present at the HBA meeting, said he is still reviewing
the information and study that was provided to the group
on Thursday.
“I thought they did a nice job in
the presentation of information and gave us some supporting
documentation for their point,” said Plunkett. “I
reviewed it but I still have questions. With as much information
as they gave us, I’ll have to run through it a second
time.”
Plunkett said he plans to address Presiding
Commissioner Betty Knight and First District Commissioner
Tom Pryor at Friday’s administrative meeting.
“My big concern is as a businessman
I just want everything that we do as a county to be as
efficient as possible,” he said.
State Representative Jason Brown, who
also attended the meeting, said he believes if the change
will benefit Platte County it should be considered.
“We need to look at the study and
if we believe the study is accurate and is a benefit to
the county and schools and helps us compete against Clay
County, then why would we not look at a change if the
change is beneficial and the study shows it will help
the county, school and help build houses in Platte County?”
said Brown.
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