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Durham tax office: unprecedented appeal surge after 2025 reappraisal complicates county budgeting
Summary
Durham Tax Administration told commissioners that the Jan. 1, 2025 reappraisal captured strong market gains and produced 10,533 appeals (well above historical reappraisal ranges), forcing larger holdbacks and complicating revenue projections; commercial income valuations diverged from cost/sales approaches in some assets, producing significant refunds and challenging timing for the budget calendar.
Durham County’s Tax Administration briefed commissioners on May 28 about how the January 1, 2025 reappraisal — which captured a rapid market rise in 2023–24 — produced an unusually large volume of appeals and created near‑term budget complications.
Scale and timing: Tax staff reported 10,533 appeals associated with the reappraisal year — far above a typical reappraisal range (historically ~4,500–7,500) and well in excess of a normal non‑reappraisal year (~75–200). The office said it had to estimate appeals for budget holdback calculations in May while many filings continued through the June 16 appeal deadline; roughly 3,000 appeals were not yet accounted for when budget figures had to be set.
Commercial vs. residential patterns: Commercial parcels (1,165 appealed) produced a disproportionate share of valuation reductions. Staff described situations where income‑based valuations (critical for apartments and office assets) diverged from sale or cost approaches because of vacancy or income changes; those differences led to substantial adjustments on a small set of high‑value assets. Tax staff gave examples of multi‑million‑dollar commercial properties with divergent income and cost approaches, and said that four major commercial sales/valuations drove much of the commercial adjustment totals.
Holdbacks and budget risk: Because the board must adopt a budget before the final disposition of appeals, the tax office explained holdbacks (reserves for appeals, exemptions and uncertain items) as a standard risk‑management tool. In this cycle, the unprecedented appeal volume increased uncertainty: the tax office estimated budgeted appeal reductions of roughly $3.1 billion (with a larger $4.3 billion if holdbacks are considered against full potential exposure), and said late and complex commercial appeals amplified scheduling and hearing workloads for the Board of Equalization and Review.
Operational responses: The Board of Equalization and Review increased meeting frequency to address the volume; tax staff said a future focus will be improved property data collection and earlier outreach to owners to reduce information gaps and late filings. Commissioners asked for detailed breakout of refunds and which appeals most affected budgeted revenue; staff committed to supply that information in follow‑up materials.
Implication for budgeting: Manager Hager and budget staff said the appeal surge complicates revenue forecasting and recommended board discussion of future calendar and practice changes (e.g., earlier appeal windows or shifting recommended‑budget timing in reappraisal years) to reduce the risk of material mid‑year revenue changes.
