With the latest round of property tax bills arriving at Newtown homes in recent days, some local property owners saw fireworks a little earlier than Independence Day. According to local officials, many taxpayers may be facing significant increases in their property taxes now that a new fiscal cycle has begun with its newly set 33.32 mill rate, up from 24.54.
A mill represents one dollar in taxation for every $1,000 in assessed property value.
But some of the largest or seemingly disproportionate increases are falling on three types of homes according to Assessor Chris Kelsey: over-55 condos, waterfront parcels and residences, and high-value properties scattered across town.
First Selectman Pat Llodra, Finance Director Robert Tait, and officials in the tax collector’s and assessor’s offices have all been fielding dozens of calls and visits from sometimes angry and often perplexed property owners wondering how their property taxes jumped so high so fast.
They note that the phenomenon is not exclusive to Newtown.
“Some of these increases are quite dramatic,” Mrs Llodra told The Bee July 2. “And with the increasing personal property taxes, and now an increase in the [state] gasoline taxes, it’s making it incredibly difficult for municipalities and their residents to provide and enjoy a quality of life.”
Mrs Llodra confirmed that after canvassing and regrading 97 percent of all Newtown properties in the early stages of the latest reval process, a state audit of the assessor’s new property valuations have been accepted and deemed fair.
Mr Tait said the state asks for every municipality to submit their “statistical parameters” for updated valuations to certify they are correct. And Mr Kelsey confirmed the state returned his inch-and-a-half-thick binder of valuations with its final approval a few days ago.
“That provides a way to test and gauge the judgment of the assessor about how he graded and valued 97 percent of all Newtown properties,” Mrs Llodra said. “And the state accepted our numbers.”
She added that failure to submit to a valuation review could halt all state aid to Newtown until the data is supplied.
“There is certainly no intent to create an unfair burden on Newtown residents, especially those facing extraordinary or unexpected [property] tax increases,” the first selectman said.
Mr Tait pointed out that several weeks ahead of the deadline for the latest round of assessment appeals, The Bee printed a report detailing the anticipated increase in taxation, and which types of homes would generally see the most significant increases. But until the new mill rate was finally set following the June 4 school budget referendum, it was difficult for people to accurately judge exactly how much their property tax bills would change.
“Once the Board of Assessment Appeals finishes their work and sets the grand list, those values can’t be changed by law — unless the homeowner can illustrate a technical error, like the valuation is applied to a 5,000-square-foot house when that house is 3,000 square feet,” the finance director said.
Mrs Llodra said that in the early stages of reviewing properties for regrading, she understood the assessor was seeing an inordinate number of properties previously graded “C” or average. But when making recent comparisons to similar properties or home characteristics either in the neighborhood, or elsewhere in town, the assessor had no choice but to fix upgrades to properties that were substantially improved compared to others formerly sharing the C grade.
“At the starting point, the assessor determined these grade classifications from the 2007 reval didn’t properly discriminate between the various types and condition of houses,” she said. “Up to now, a lot of those homes had C grades.”
Mrs Llodra also pointed out that in the 2007 revaluation, it was more middle value homes that bore the brunt of significant property tax increases.
“The concept is to equalize the burden based on the [property’s] value in the current marketplace,” she said. “But until that new mill rate was set, it was hard to get a real idea of what the valuation increase meant in dollars, or how those changes applied to similar properties.”
Mr Tait said the revaluation seeks to establish an equitable distribution of taxes based on any changes in a property’s market value.
“But that can create sticker shock when there are unusual or unexpected changes,” Mrs Llodra said. “Residents need to know this happens in every town, whether the tax burden shift is residential to commercial, by building types or locations.”
She said Mr Kelsey and Mr Tait have been working to analyze what has driven the shifts in the latest round of tax burdens, compared to the way certain property types and locations have changed in value over time.
Similar Increases Elsewhere
Mr Kelsey said he is talking to assessor colleagues around the area, and the shift in burdens to over-55 condos and waterfront properties is happening everywhere. In many towns, high value homes were also undervalued up to the time of their latest assessment, he is learning.
The assessor is empathetic to homeowners whose deadlines to request assessment appeals was March 20, and who did not have a mill rate to calculate their tax burden until June 5.
“But no matter where the mill rate eventually falls, you have to appeal an assessment, not a property tax,” he said.
Mr Kelsey said among all types of homes he regarded in the early stages of the last reval, it was the McMansions and waterfront homes that he believes finally received fair and equitable assessments.
“We were finally able to get those homes valued where they should be,” he said. “The high value homes were found to be valued comparatively lower in the 2007 reval, so they experienced a disproportionate increase in taxes this year because of those inaccurate revaluations as of October 2007.”
In examining the over-55 communities and condos, Mr Kelsey noted they held their value perhaps more than most properties in the community.
“They did not fall that average 23 percent,” Mr Kelsey said. “Many were relatively new units that are still very desirable in the marketplace.”
He said since there was so comparatively little reduction in those assessments, when the new mill rate jumped, so did the tax bills.
Finally, regarding waterfront properties, Mr Kelsey explained that until the current revaluation, none of those homes and parcels were tagged with a “premium value,” even though those owners enjoyed a premium on the properties’ market value.
“We have sales data to back that up,” he said.
He noted, however, that the “premium” percentage is based on the neighborhood where the home is located. So areas with mostly converted modest to midrange cottages would see less of a premium then homes, for example, in the Bridge End Farm neighborhood where virtually every waterfront home was built both recently and to high value specifications.
He illustrated another waterfront phenomenon where a Great Quarter neighborhood waterfront home went down in value, but the premium on the property itself increased its value from $206,000 to $233,000 causing a 50 percent increase in taxation.
Another high value home in the Hattertown area previously valued at $841,000, sold for $1.3 million in 2005. That home sold again in 2012 for $1.35 million, but its valuation jumped to $1.1 million, generating a $27,077 tax bill.
“That homeowner saw their tax bill increase from $14,450,” Mr Kelsey said, “it almost doubled.”
Mr Tait said that across town, 60 percent of residential homes did not receive taxation increases. He said much of the work being done to complete the latest revaluation was done by a regional appraisal firm.
The burden of the bottom line was not lost on the first selectman.
“Unfortunately, especially here in Newtown, it was a terrible time for the reval to hit,” Mrs Llodra said. “I wish the impact was not so severe for some of these home owners. For many (experiencing an increase) it was the worst possible time for these shifts in their valuations to occur.”