Slide 1: New Castle Commercial Reassessment 2025
New Castle Commercial Reassessment 2025
Slide 2: Death & Taxes
Death & Taxes
Slide 3: Court’s Decision in Reassessment Litigation
Court’s Decision in Reassessment Litigation The court determined that property values had changed significantly enough since the previous reassessment years ago and were no longer represented as the “true value of money” and that the current assessments were not uniform (i.e. not equitable). The new
Slide 4: Reassessment Litigation
Reassessment Litigation MAY 2020 To resolve pending litigation, New Castle County agreed to conduct a countywide reassessment.
Slide 5: True Value of Money
True Value of Money
Slide 6: USPAP Market Value Definition
USPAP Market Value Definition MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
Slide 7: USPAP Market Value Definition
USPAP Market Value Definition Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they co
Slide 8: Date of Value
Date of Value Market Value and Market Conditions as of JULY 1, 2024 Assessments must be between 95% and 100% of the median of all valid sales as of the Date of Value The new assessed values will be effective for the 2025 tax year.
Slide 9: Why Reassess?
Why Reassess? Reliable Equitable 100% Accurate Market Value Valid
Slide 10: Fear
Fear Pay more taxes Government will spend more Will lose tenants Have to sell
Slide 11: Revenue Neutral
Revenue Neutral ASSESSMENT Assessment Increase TA X R AT E (+40%) Tax Rate Decrease (-40%)
Slide 12: Tax Formula | The A.R.T. of Property Taxation
Tax Formula | The A.R.T. of Property Taxation A R T Assessment Rate Tax $200,000 X .74% $1,480
Slide 13: Assessment Increases 4X
Assessment Increases 4X Assessment (A) Rate (R) Tax (T) $200,000 X .74% $1,480 Assessment (A) Rate (R) Tax (T) $800,000 X .185% $1,480
Slide 14: Countywide Reassessment | Revenue Neutral
Countywide Reassessment | Revenue Neutral YOUR PROPERT Y VALUE CHANGE P R O P E R T Y TA X I M PA C T Lower than average change Taxes likely for property class decrease Similar to the average Taxes likely change for property class do not change Higher than average change Taxes likely for property cl
Slide 15: More County and School Taxes?
More County and School Taxes? TA X I N C R E A S E C A P S COUNTY 15% SCHOOL 10%
Slide 16: What about Municipality Taxes?
What about Municipality Taxes? Some municipalities use the county assessments and others do not. A municipality may, by separate and specific vote, seek to increase their property tax rate.
Slide 17: Reassessment Goals
Reassessment Goals LAST CONDUCTED IN 1983 Implement new values for all properties to reflect 100% market value as of JULY 1, 2024 Meet or exceeds the Uniform Standards of Professional Appraisal Practice (USPAP) Meet or exceeds the “Standard on Mass Appraisal” — International Association of Assessing
Slide 18: Key Questions
KEY QUESTIONS How have commercial market values changed in 41 years? Did they change consistently? Will everyone go up or down the same amount? How will this affect me?
Slide 19: Phases of Reassessment
Phases of Reassessment Aerial Data Data Analysis Informal Imaging Collection & Review Meetings Spring 2022 2022–2023 2022–2024 Fall/Winter 2024
Slide 20: Aerial imaging / Sketch verification/detection
Aerial imaging Sketch verification/detection
Slide 21: Change Analysis imagery comparison
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Slide 24: Data Collection | Data Gathering Analysis
Data Collection | Data Gathering Analysis
Slide 25: Data Collection & Gathering
Data Collection & Gathering Physical Sales Data Economic Data Inspection County Files Income Submissions Measurements Data Mining Data Mining Survey Data Survey Data
Slide 26: Data Collection & Gathering
Data Collection & Gathering Real Capital Analytics - Historical Transaction Trends $150,000 $130,000 $110,000 $90,000 _ ma $50,000 =——= Cap Rate . tyler technologies
Slide 27: Comparable Sales
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Slide 28: Capitalization Rates
Capitalization Rates FIGURE 7: CAP RATES FOR MAJOR PROPERTY TYPES IN THE U.S. Office Ret! Indust 3 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 tyler technologies
Slide 29: Apartment Income by Unit and Type
Apartment Income by Unit and Type
Slide 30: Market Asking Rent Per Unit by Bedroom
Market Asking Rent Per Unit by Bedroom
Slide 31: Vacancy
Vacancy Vacancy in New Castle, County DE 2013 2014 2015 2016 2017 2018 2021 © 2022 YTD. mmm Vacancy Units —==Vacancy Percent tyler technologies
Slide 32: Market Cap Rate
Market Cap Rate Forecast . tyler technologies
Slide 33: Traffic Counts | Neighborhoods
Traffic Counts | Neighborhoods
Slide 34: Traffic Counts | Neighborhoods
Traffic Counts | Neighborhoods
Slide 35: Wilmington Neighborhoods
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Slide 36: Methodologies
Methodologies Cost Approach Sales Approach Income Approach
Slide 37: Valuation
Valuation Three accepted approaches/methods to arrive at value. Cost approach provides an estimate of value based upon the replacement cost of the improvements, less depreciation, plus the value of the land. Income approach estimates value by capitalizing the net operating income of a property. Mark
Slide 38: Cost Approach
Cost Approach DEPRECIATED LAND VALUE MARKET VALUE BUILDING VALUE 10 Acres X $100,000 20,000 SF X $100/SF $2,800,000 Less 10% Depreciation
Slide 39: Sales Approach
Sales Approach The sales approach estimates market value through the analysis and application of standard units of comparison. Examples of standard units of comparison are sale price per square foot, sale price per apartment unit, or sale price per acre.
Slide 40: Commercial and Industrial Models
Commercial and Industrial Models The income approach estimates market value by capitalizing net income. Net income and capitalization rates are arrived at by an analysis of Income & Expense forms These forms provide data on local market rents, expenses, and vacancies. Income approach models are buil
Slide 41: Income and Expense Surveys
Income and Expense Surveys Property owners/managers are encouraged to complete the forms provided to the best of their knowledge, as accurate and complete information is critical to determining fair and equitable values that reflect current local market conditions and will preclude the use of availa
Slide 42: Income & Expense Data Worksheet Instructions
INCOME& EXPENSE DATA WORKSHEET INSTRUCTIONS Enter Property Address Enter T ‘Annual income and Expense Statement for the year ending? PROPERTY ADDRESS: — PROPERTY USE (checkall that apply): Dapartment Dlortice Cretaii = Lomixeause Lshoppingcenter — Lindustrial Dotner CHECK HERE IF ANY PART OF THIS PR
Slide 43: Schedule A - Apartment Rent Schedule
PROPERTY ADDRESS: — SCHEDULE A- APARTMENT RENT SCHEDULE f lyoit Type No.of MonthiyRent_a“[TeaseTerm | complete this section for apartment rentals only ~ Total] Rented | Rooms ] baths | Saft. | Per Unit | Total ITEMS INCLUDED IN RENT Efficiency (Check all that apply) 1 Bedroom OHeat CO Furnishings 2
Slide 44: Purchase Price Verification
COPY AND ATTACH IF ADDITIONAL PAGES ARE NEEDED PURCHASE PRICE VERIFICATION ~ ALL OWNERS MUST SIGN AND DATE THE ATTESTION BELOW ~ Purchase Price Down Payment Purchase Date: Selling Broker: Broker Telephoneti: Date of Last Appraisal: Appraisal Firm: Appraised Value: $s Payment FirstMortgage: $. Intere
Slide 45: Income and Expense Surveys
Income and Expense Surveys Will you tell my neighbor or anyone else what my income and expenses are? Why use an income approach? Isn’t appraised value based on what properties sell for? What happens if I do not fill this out? All information provided will remain strictly confidential
Slide 46: Income and Expense Surveys
Income and Expense Surveys My business and real estate were really impacted by covid. Are you going to reflect that impact in my new assessment? I just had an appraisal conducted on my property should I submit that as well? If my tenant pays the expenses, should I still write down the expenses?
Slide 47: Income and Expense Surveys
Income and Expense Surveys I own residential apartments why did I get this form? Can I just submitted tax returns or spreadsheets from my accounting programs? If my tenant pays the expenses, should I still write down the expenses? Won’t my taxes go up if I fill out this form?
Slide 48: Income and Expenses Balance Sheet
Income and Expenses Balance Sheet
Slide 49: Income Approach
Income Approach NOI C A P R AT E M A R K E T VA LU E $419,723 10% $4,197,723
Slide 50: Valuation Testing
Valuation Testing SPECIFICATION Which Approach? What Property Characteristics? CALIBR ATION Quantifying the Variables ITER ATIVE
Slide 51: Final Appraised Value Compared to Time Adjusted Selling Price
Final Appraised Value Compared to Time Adjusted Selling Price
Slide 52: Process Summary
Process Summary Hearings Valuation Review Modeling and Pre-Review Analysis Data Collection
Slide 53: Notice to Taxpayers
Notice to Taxpayers Late in 2024, property owners will receive a notice of the new tentative appraised value. The property owners are encouraged to evaluate whether the assessment appears to be reasonable. If it is, no further action is required.
Slide 54: Informal Hearings
Informal Hearings Informal Meetings with Tyler Appraisal Staff: If you believe the proposed value does not reflect the current market value, instructions will be provided with the notice on how to arrange an informal review of the value with Tyler. These reviews give the property owner a simple and
Slide 55: Informal Property Review
Informal Property Review Informal Review Goals: One on one meetings with property owners Review property data Collect new information Correct existing data as needed Educate property owners on the valuation process
Slide 56: Quality-Driven Process = Quality Results
Quality-Driven Process = Quality Results Quality Data Collection Fairness Detailed Analysis Equity & Modeling Transparency Accurate Valuation Review & Hearings
Slide 57: Tyler Technologies Contact Info
T Y L E R T E C H N O L O G I E S C O N T A C T I N F O Michael McFarlane Tyler Project Supervisor 302.395.3620 NewCastleCounty@tylertech.com
Slide 58: County Assessment Contact Info
C O U N T Y A S S E S S M E N T C O N T A C T I N F O Denzil Hardman Accounting & Fiscal Manager Assessment (302) 395-5083
Slide 59: Reassessment Project Website
R E A S S E S S M E N T P R O J E C T W E B S I T E For further information: empower.tylertech.com/New-Castle-County-Delaware
Slide 60: Thank You for Joining Us Today
T H A N K Y O U F O R J O I N I N G U S T O D AY. We would be happy to answer any questions at this time.
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