Buncombe raises taxes on $25M mansion; still large tax gap in highest-end homes for sale
Signaling a likely change in how a new surge of multi-million dollar mega-mansions contribute to public coffers, Buncombe County officials have raised the taxes of a $25 million estate, billed as one of the most expensive homes in the Asheville area.
The increase in the tax appraised value for the South Asheville Deerhaven Gardens, which originally went on the market for $34 million, comes after extensive coverage by the Citizen Times about large disparities between what county tax assessors have said the mansions are worth ― and real-world prices.
Reached Nov. 3, Keith Miller, head of the tax assessor's office, declined to talk specifically about Deerhaven, but said "any change in property value at this time must be related to an underassessment due to property characteristics or the owner has made a physical change to the property since the last reappraisal."
In a June interview with the Citizen Times, Miller said both the county assessed value for Deerhaven Gardens ― a secondary home featuring six bedrooms, seven full bathrooms, five half-baths, a two-story guest house, an infinity pool and a full-size tennis court on a sprawling 5 wooded acres ― and the entire system for assessing high-end homes were being reviewed.
Tax assessments are subject to challenge by property owners and can be appealed to a court, something wealthier owners are more able to do, researchers and activists have noted. Valerie Sowell, listed as a contact for Deerhaven, which is now on the market for $25 million, declined to comment.
While the tax value has nearly doubled for the estate since 2021 ― from $3.3 million to $6.3 million ― it still lags far behind what the owners say the mansion and grounds are worth, reinforcing a criticism by activists and researchers who say the wealthiest homeowners are receiving sizable tax breaks.
“The research that we were able to undertake proved beyond any doubt that irregularities in the way property is assessed in this region penalizes our most economically vulnerable residents while unfairly subsidizing some of the wealthiest property owners in our region," Asheville-based urban planner Joe Minicozzi said in a report released in July.
That gap persists in the sales of the highest-end homes, according to Citizen Times analysis of home sales.
Tax assessed value is used to calculate tax bills by multiplying it by a tax rate set by elected officials. The change in Deerhaven's tax value means it will see an increase of more than $18,000 in annual county and fire taxes. But if it were taxed at its $25 million asking price, owners would pay $149,000.
Recently reviewed records show assessors made the change to Deerhaven's value in July. A month earlier Miller told the Citizen Times of planned changes to how the highest-end mansions, which were becoming a larger share of the local market, would be assessed to close the large gaps between assessed and real-world values. That came after the assessor had pushed back for months over raising appraisals, in part because of legal reasons.
"That's what I need to do for the residents of Buncombe County, is to make it right, to make it equitable. And I'm working hard toward making that happen," Miller said in June.
But in his latest statement, Miller said there were still limits.
"The North Carolina General Statute does not allow a general reassessment of any property until the year of the general reassessment. Therefore, no change related to general market conditions will occur for any of the properties you have questioned or otherwise until the 2025 reappraisal," he said.
"Property assessment staff will work throughout 2024 toward new values for Jan. 1, 2025. Please keep in mind we are working within the 2021 schedule of values."
Deerhaven owner Marcus Katz had originally privately listed the estate with an asking price of $34 million. In August, the asking price was reduced to $25 million. The home is still for sale.
Currently, the median sales price for a home in Buncombe County is $454,000 — up 4.3% year over year as interest rates and prices continue to rise.
More: Asheville homes hit record Q3 price, interest rates rise. When should locals buy homes?
66 Deerhaven Lane
Listing price: $25 million (down from $34 million)
County tax appraisal (July 6, 2023): $6.3 million
County and fire taxes based on listing price: $149,000.
Taxes based on appraised value: $37,702.
Difference: $111,298
Deerhaven Gardens was previously appraised in 2021 at $3.3 million.
Appraisals of recently sold luxury homes.
The Citizen Times looked at the five highest-priced homes sold in September, according to CanopyMLS, and calculated property taxes based on location, fire district and school district for each home.
Of the homes sold, one was built in 2023 and appraised in March — prior to its completion and sale. The rest of the homes were appraised in 2021. Of these homes, only one — 27 Edgewood Road — sits within Asheville city limits, which is reflected in additional taxes.
The home sold closest to its appraisal value was 27 Edgewood Road, which sold at 165% of its appraisal value. The home at 18 Featherstone Trail was incomplete at the time its appraisal during March of this year. It sold at 734% of its appraised value from March, which only appraised the land only. The property will receive a reassessment in 2024.
Here's a short list of luxury homes sold in the last month:
18 Fairsted Drive
Sale price: $3.4 million
County tax appraisal (2021): $1.65 million
Taxes based on appraised value: $8,875
Taxes based on sold price: $20,264
Difference: $11,388
18 Featherstone Trail
Sale price: $3.4 million
County tax appraisal (2023): $459,000
Taxes based on appraised value: $2,739
Taxes based on sold price: $20,115
Difference: $17,375
273 Secluded Hills Lane
Sale price: $3.3 million
County tax appraisal (2021): $1.65 million
Taxes based on appraised value: $9,848
Taxes based on sold price: $19,688
Difference: $9,819
11 Sheep Pasture Lane
Sale price: $2.7 million
County tax appraisal (2021): $1.2 million
Taxes based on appraised value: $7,177
Taxes based on sold price: $16,092
Difference: $8,914
27 Edgewood Road
Sale price: $2.5 million
County tax appraisal (2021): $1.55 million
Taxes based on appraised value: $15,570
Taxes based on sold price: $25,678
Difference: $10,108
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Will Hofmann is the Growth and Development Reporter for the Asheville Citizen Times, part of the USA Today Network. Got a tip? Email him at WHofmann@citizentimes.com.
This article originally appeared on Asheville Citizen Times: Asheville most expensive home for sale taxes raised
