DATE: Wednesday, April 30, 1997             TAG: 9704300504

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   71 lines

ASSESSMENT HIKE RAISING NORFOLK TAXES

Plenty of homeowners will see their real estate tax bills increase next year, even though the city isn't planning to raise the rate.

The reason: real property values citywide have increased by an estimated 1.2 percent over last year. In some neighborhoods, homes increased in assessed value by an average of 5 percent, city tax assessors said Tuesday.

A typical resident who owns a $100,000 home would pay about $17 more based on the citywide increase in property values, the equivalent of a 1.7-cent tax hike, officials said.

It's a mixed blessing for property owners.

The good news is that their property is worth more, at least on paper. The bad news is that they'll pay more taxes as a result.

Since the increase in property values is a citywide average, some homeowners might pay the same real estate tax as the current year, while others would paying less if their property assessment declined.

The increase in assessed values does not include the value of new construction or improvements to property, officials said.

Overall, the value of existing and new property will increase this year by an estimated 2.1 percent, better than the last five years combined, Wayne Trout, the city's tax assessor, said Tuesday.

Based on property sales, the average value of homes citywide appears to be increasing, a development that city officials view as essential to maintaining and building Norfolk's tax base.

``That certainly represents a positive trend for us,'' Trout said.

Homes in neighborhoods in the city's center experienced the largest gains in value under the annual reassessment, officials said.

Neighborhoods near Five Points in Norview, such as Brandon Place and Pennsytown, and in the Wards Corner area near Granby Street and Little Creek Road, such as Pinehurst, Virginia Gardens and Restmere, for example, saw average increases of about 5 percent, the largest in the city, Trout said.

Some of the city's older, more established neighborhoods, such as Larchmont and Ghent, experienced no or very little increase on average, Trout said.

The assessed value of houses in a particular neighborhood is based on sales made between July 1, 1995, and June 30, 1996. Virginia law requires that homes be assessed as close to 100 percent of market value as possible.

Trout acknowledged that some homes sell for less than the assessed value. But overall, he said, ``what we're continuing to see is that properties sell for more than what they're assessed.''

State officials estimate that the city's assessment overall is at about 93.7 percent of market value, and should increase to 95.7 percent by next year, Trout said.

This year marks the first since fiscal 1993 that the city's assessed real estate values, excluding new construction, rose by more than 1 percent.

Virginia law requires localities to hold a public hearing whenever their assessed real property values increase by more than 1 percent. In effect, the law prevents local officials from using property assessments as a stealth tax increase without having to vote publicly to raise taxes.

Norfolk plans to hold its hearing on the same day the public has a chance to comment on the city manager's proposed 1998 budget, May 7 at 7 p.m. at Chrysler Hall.

The city's current real estate tax rate is $1.40 per $100 of assessed value. As a result of the rise in property values, the city could drop the rate to $1.383 per $100 and generate the same amount of tax revenue.

But it's not conceivable that the city would lower the tax rate, City Manager James B. Oliver Jr. said.

``The city can't live on less money,'' Oliver said, noting that the 1.2 percent increase doesn't keep pace with inflation. ``In that standard, the city is actually losing buying power.''

About 29 percent of the city's revenue is derived from general property taxes. The increase in assessed values is expected to generate an additional $1.1 million in revenue. KEYWORDS: PROPERTY ASSESSMENT INCREASE REAL ESTATE TAX

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