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The amount of your new tax bill is calculated by multiplying your new assessed value by the new tax or mill rate. Be careful not to multiply a new assessment by an old tax or mill rate.
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A revaluation is the process of estimating new values on real estate based on specific rules and current market data. This process requires a careful analysis of recent selling prices conducted to identify and quantify the features that have motivated buyers and sellers in the real estate market. This analysis results in the creation of schedules that are used to value all of the properties in the city or town. These schedules are then statistically tested to verify their ability to accurately and uniformly predict estimates of current fair market value. An analysis of current income and expenses supplied by local commercial property owners is utilized in the commercial valuation process. These value estimates are statistically tested and proven.
Since all assessed valuations are based on sales as of a certain date, later changes in the market will gradually make property assessments out of step with the real estate marketplace. The rise and fall of real estate values make certain properties more valuable or less valuable, in relation to each other. Doing a revaluation periodically brings the assessments into line quicker, and provides a correction to assessments when markets rise or lower. It makes the assessment of property taxes fairer, more accurate, and avoids the “sticker shock” that occurred when these projects were performed every 10 years or so.
Sales of properties. We review and analyze recent property sales. Depending on the volume, we may use one, two, or even three years of data. From these sales, we generate valuation tables and apply them throughout the City or Town. We focus primarily on “Fair Market” sales.
The American Institute of Real Estate Appraisers defines fair market value as “the most probable price for which a property will sell in a competitive market with buyer and seller each acting prudently, knowledgeably and for self-interest and assuming that neither is under undue duress”. Sales such as foreclosure and family sales are not considered to be “arms-length” or fair market transactions.
They are carefully analyzed based on:
The following are some, but not all of the variables that affect value:
Land values can vary dramatically based on:
The real estate market is not a “perfect market” and price is not always equal to value. Similar properties usually do not sell for exactly the same price because the motivations of buyers and sellers are not always the same. Similar properties usually tend to sell within a “value range” rather than for one specific price. According to the definition of fair market value, your value represents the “the most probable selling price” and tends to be in the middle of the range of what similar properties have recently sold for. Therefore, your appraised value could be higher or lower than what you actually paid for your property.
Not from the revaluation. The tax rate is set at the financial town meeting, or by a City budgetary process, so the voters decide if taxes go up. Individually – If the budget stays the same, some property owners will go up, some will go down, some will stay just about the same.
The Municipality determines the amount of revenue (R) to be raised. The Municipality then totals all the assessments (A). The Municipality divides the revenue (R) by the Assessments (A) to get the actual tax rate: Tax Rate = R/A (or mill rate).
At the end of a revaluation project, a notice will be sent to every property owner advising them of their new value.
Some communities hold “informal hearings,” and some communities have an “abatement” procedure. Your new assessment notice will have information regarding these procedures.
Any documents or evidence that support your claim. This includes:
Those who attend a hearing will receive a notice indicating whether their assessment has been changed, and, if so, what the new value is.
At this point, you still have the traditional remedies available to any taxpayer:
Compare your value to similar properties in your area which have sold. Compare to recent appraisals you have had on your property for mortgages or refinancing. Note that prices have been on an upward trend, so an appraisal greater than 2 years old needs to be adjusted.