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Bill requiring appraisal submissions on hold

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AFTER hearing from members of Guam’s real estate community, Sen. Michael San Nicolas is looking to amend Bill 36-32 so it is acceptable to real estate appraisers, realtors and other industry stakeholders. Until the bill meets that criteria, he will not seek to move it forward in the legislative process.

The bill was introduced on Feb. 4 and would require licensed real estate appraisers to submit property valuations completed during the last five years to the Department of Revenue and Taxation “for the purpose of updating real property values for real estate tax purposes,” the bill reads.

San Nicolas estimated the bill would save the government of Guam $1.25 million by reducing the number of properties requiring updated appraisals and permitting the government to adjust tax assessments “in a timely manner.”

“Sen. San Nicolas is working with [real estate industry professionals] to see if there’s a way it can be amended so it is palatable to them,” said John Paul Manuel, policy analyst with San Nicolas’ office. “He is committed to only move [the bill] forward with the support of the business community.”

On Tuesday, Siska Hutapea, longtime Guam real estate expert and president of Cornerstone Valuation Guam Inc., told members of the Rotary Club of Tumon Bay that while “the intention [of the bill] was good,” she was concerned that the government would have access to, and use of, appraisals paid for by private clients.

In addition, she said, appraisals for banks are often based on liquidation value – “the government would not want a liquidation value to become a real property tax value.”

The timeframe from which the appraisals would be required would not necessarily yield accurate results. “There are a lot of things that can happen over five years,” she said. “In 2007, we had the peak of our real estate [market], and if you look at 2009, it’s the downturn.” The market values reflected in the different appraisals would not be consistent, she said.

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