Valuing Vineyards For Assessment Purposes
The assessed value of vineyards in Napa County account for several hundred million dollars of the total assessment roll of almost $10 billion. Like all other real property, vineyards are subject to Proposition 13, have base year values and are reappraised on changes of ownership and new construction (new vines or replanting). There are three main components of vineyards that contribute to the total value, the land, the non-living improvements (NLI) including stakes, trellises, irrigation and frost protection and the vines themselves. Unlike homes and buildings, vineyards are subject to more frequent changes as varietals move in and out of favor, spacing and trellises are modified to meet new technology and diseases like phylloxera or Pierce's impact the vines.
On change of ownership of a parcel that either is already planted to vines or is capable of being planted, the land value is usually derived from comparing sales of lands either already in vineyard or to be planted to vineyard. The appraiser must make adjustments for location, size and special characteristics such as proximity to a stream or river, slope, soil, etc. If the property is already a producing vineyard and there is adequate information about production, expenses and prices received for the grapes, the appraiser can use an income approach to arrive at a value which then must be allocated to the three components.
Non-living improvements are usually valued by the cost approach when first installed. For a change of ownership the appraiser often makes an allocation of the sale price to NLI based on their cost new less any depreciation for the age or condition of the vines. Costs are maintained on a county-wide basis using information received from individual owners on vine reports that they receive from our office on a three year cycle. All information received is kept confidential. When a block of vines is replanted, the old NLI base year values are removed and the new costs are enrolled as new base year values. In the first five years of a newly replanted block of vines, NLI values often change as wires and crossarms are added. Water frost protection and drip irrigation often involve a water source, usually a reservoir, pumps and main pipelines, laterals and risers. When a block of vines is removed the reservoir, pumps and mains usually remain with only the laterals and risers being removed. When the frost protection/irrigation system of the new planting is reestablished, only the laterals and risers receive new base year values.
Vines are currently valued on a per acre basis regardless of variety or spacing. For a change of ownership, the appraiser will allocate a portion of the purchase price to the vines unless the vineyard is very old or diseased. Sales of planted versus non-planted acreage give an indication of the contribution that the vines make to the sales price. For new vines, the first three years after planting are exempt from taxation since they are not considered to be in full production. For the fourth year the vines are enrolled using a per acre value based on values derived from comparable sales in the prior year or two. For the 1998 tax year (July 1, 1998-June 30, 1999) vines planted in 1994 will come out of exempt status at a value of $15,000 per acre. By comparison twenty years ago (1978) the value per acre was $2,500.
It is in the best interest of vineyard owners and purchasers to give the Assessor as much data as possible about their vineyards so that we can arrive at a fair assessment. Unfortunately, only 60%-65% of the vineyard owners who receive vine reports in any given year return them to us leading to later escape assessments when we discover that new vines were planted. In other cases owners who fail to return the reports are assessed for several years for vines that have been removed.
If you have questions on this topic please contact Napa County Assessor John Tuteur at (707) 253-4459 or by e-mail john,firstname.lastname@example.org.