Revaluation: Home values will drop
The mill rate will probably jump dramatically next budget season, but it won’t be because the town has gone on a spending spree. It’s revaluation time, a state-mandated procedure the assessor’s office must complete every five years.
The last revaluation took place in 2007, and because housing prices have dropped dramatically since then, “there is a very good potential value rates will decline,” Wilton Assessor David Lisowski said last week. As property assessments fall, the mill rate must increase in order for the town to continue collecting enough tax revenue to pay for town expenses.
But that doesn’t mean more tax money will be collected because of assessment changes.
“We would look to keep taxes at our targeted 1.75% increase year over year,” said Board of Finance Chairmanhe will look at every property sale that has taken place in the last 18 months. (Some sales such as foreclosures or sales between family members that would not reflect true value will not be considered.)
Typically, a revaluation would take into account a year’s worth of sales. “We’re looking at 18 months because of the way the market’s been trending,” he said. The time period covered will be April 1, 2011 through Oct. 1, 2012.
Commercial properties are assessed based on sales analysis and income analysis.
“Once we have a computerized valuation table to generate a valuation on sales properties, we will do a field review of properties not sold,” Mr. Lisowski said.
The field review is done by an appraisal expert who looks at a property from the street to see if data for that particular property is accurate. For example, have any changes been made without a permit? Are there any adjustments that need to be made? The assessor routinely makes adjustments for properties that are close to power lines or railroad tracks, have wetlands or are near commercial properties.
“If there are sales of any of those, we want to adjust the non-sale properties accordingly,” Mr. Lisowski said.
While this is not the type of revaluation that requires physical inspection of properties — that takes place every 10 years — appraisers will make cold call inspections on homes that have been sold within the past 18 months. If the homeowner is not home or there is only an underage youngster at home, the owner will get a letter instructing them to call for an inspection.
“We’ll hit the streets in December with a notice of assessment,” Mr. Lisowski said. Assessments are set at 70% of market value. Property owners will have the opportunity to challenge their assessment in an informal hearing with an appraiser from the revaluation company.
After taking into account any changes, Mr. Lisowski must have the revaluation done by the end of January, in time to complete the grand list also by the end of January. The mill rate will be set after all assessments are finalized.
There are two main reasons for conducting a revaluation, Mr. Lisowski said.
The first is to equalize the tax burden.
The second is to bring property values up to date to reflect current market valuations.
“Over five years, properties don’t change the same,” Mr. Lisowski said. “If you go by that premise, when all are adjusted to reflect market value there will be an adjustment of each person’s percentage of the share of the tax burden.”
That means there won’t be a blanket percentage change in property values. One property might decrease 10% in value and another 8%. That also means the taxes on specific properties won’t change uniformly.
Mr. Serenbetz acknowledged this adds a complication factor, which can make revaluation confusing.
“Most people don’t understand that when their property gets valued down, their taxes won’t go down,” he said.
That is a concern Mr. Lisowski shares.
“Don’t take the revised 2012 assessment and apply it against the current tax rate (21.0555 mills),” he said. “That would result in a big tax cut.”
The way property owners should look at it, he said, is to decide if the new assessment is what they could sell their property for.
If not, “that’s a reason to come in for a hearing,” he said.
Do assessments affect home sales? Ryan Cornell, a broker with William Pitt/Sotheby’s International Realty in Wilton, doesn’t think so.
“What really affects prices, values and marketability is how high the taxes are,” he said. “Whether assessments are high or low doesn’t make a difference. You still have to pay the whole bill.”
He called the appeals process “a golden opportunity to save significant amounts of money. “Ninety-five percent of people don’t pay attention to their taxes because they are bundled into their mortgage payment,” he said. “They don’t even know if they are appropriate.”