Surry County is proposing a “limited scope reassessment” of property values to keep pace with a rise in real estate sale prices since 2023.

The reassessment may cause some homeowners to see an increase in the amount owed on their county real estate tax bills.

State law mandates a default four-year reassessment cycle, though counties with populations less than 50,000 are allowed to wait up to six years, which Surry did from 2016 through 2022.

According to Don Thomas, a representative of Roanoke-based Wingate Appraisal Service, a limited scope reassessment differs from a general reassessment in that appraisers don’t make in-person visits to each parcel in the county to value what’s built, but rather look at recent sales to determine which types of real estate are selling at higher-than-assessed prices, and then adjust their real estate tax assessments accordingly. When Wingate last performed a limited scope reassessment for Surry in 2023, tax assessments were within 97% of sale prices according to Surry Commissioner of the Revenue Jonathan Judkins.

A 97% “sales ratio,” as the percentage is termed, would mean a home that sells for $100,000 would be tax assessed at $97,000.

As of July, according to Thomas, Surry’s sales ratio had fallen to 88%, which means real estate in Surry is selling at prices roughly 9 percentage points higher than last year.

“The market has not cratered, it hasn’t tanked, it hasn’t really plateaued yet from what we can tell,” Thomas said. “But nonetheless that brings us to the point as to how the current assessments in Surry compare to the market value statistically speaking.”

Without another reassessment, the lowered sales ratio will have a direct impact on Surry’s public service corporation tax revenue, Judkins said.

Certain types of real estate such as Dominion Energy’s Surry nuclear power plant pay public service corporation taxes that are calculated by the state based on a locality’s sales ratio. 

Under a 100% sales ratio, Surry would take in $15.8 million in public service corporation taxes. Public service corporation taxes account for 53% of the county’s total annual tax revenue, according to the county’s 2024-25 budget.

Surry supervisors voted 4-1 on Aug. 1 to authorize the solicitation of bids for a limited scope reassessment. Under the Virginia Public Procurement Act, Wingate, despite its association with Surry as its assessor going back to 1979, must submit a formal cost estimate and be awarded a new contract ahead of every reassessment. 

Dendron District Supervisor Amy Drewry cast the dissenting vote. Drewry questioned the need for another reassessment, and its impact on homeowners who pay real estate taxes, asserting “most municipalities” collect public service corporation taxes at an 80% to 89% sales ratio.

“That may be the case,” Judkins said, but asserted Louisa County, which is home to Dominion’s North Anna nuclear plant, also tries to keep its sales ratio as close to 100% as possible due to the impact on public service corporation tax revenue.

According to Thomas, the limited scope reassessment would have to be complete by Dec. 31, with new valuations taking effect Jan. 1, unless the state grants a three-month extension through March 31, 2025.

Surry, Thomas said, is difficult to reassess due to its population of only 6,500 residents. Only eight sales recorded in county land transfers from July, he said, would qualify as the basis for a reassessment.

“You don’t have a whole lot of data to base big analyses off of so you really have to get into it and you have to know a little bit about where you are as far as the location in the county and what’s desirable in the market, what’s moving the most,” Thomas said.

A limited scope reassessment, “doesn’t mean that we’ll do a blanket reassessment to all properties; it means that we’ll adjust properties as they appear to need to be adjusted,” Thomas said.

Supervisors in neighboring Isle of Wight County, which also last reassessed property values in 2023, earlier this month discussed increasing the frequency of assessments from four years to three to keep pace with the market, but not all were in favor of what Isle of Wight Commissioner of the Revenue Gerald Gwaltney termed a two-year “desktop review,” which would entail a similar process to the limited scope reassessment proposed in Surry. Isle of Wight too has seen its sales ratio fall from 97% in 2023 to 89% as of July, Gwaltney said.