Rockland shares answers to frequently asked valuation questions

Mon, 08/24/2020 - 8:30am

    The City of Rockland has shared the following letter that it sent to property-owning residents regarding Rockland’s recent revaluation.

    August 13, 2020
    To the Citizens of Rockland:

    Because there is a property revaluation underway, this letter addresses frequently asked questions related to revaluation, including what it is, why it’s necessary, and how it impacts property taxes.

    Why is Rockland reassessing property values?

    A revaluation is necessary to make sure that the City’s property tax burden is distributed fairly across properties, based on current property values. It is not done to raise taxes.

    The State recommends revaluation every ten years. The City’s last revaluation was done in 2005, 15 years ago, and Rockland’s real estate market has changed considerably since then. Because some properties change value more than others, it is necessary to update valuations to reduce inequities in taxation that develop over time. Revaluation ‘resets’ the taxable value of all properties to current market value.

    What is the revaluation process and timing?

    The City hired KRT Appraisal to determine market value for each property. Market value is the likely price a property would bring if sold in a competitive market.

    KRT sent information on estimated market value to property owners in July 2020. A property owner may appeal the new value by calling the Assessor’s Office at 207-594-0303. KRT has extended the deadline for the residential appeal process to coincide with the commercial appeal process so don’t delay, call if you have questions.

    Will my tax bill change?

    Whether your tax bill changes, and by how much, will depend how your property increased in value relative to the average property. For example, if since the last revaluation your property value increased at the average rate of properties overall, then taxes for your property will stay the same. If your property value increased at a higher than average rate, your taxes will go up. And if your property value increased at a lower than average rate, your taxes will go down.

    Say for example that all property values were to double, we would not be collecting twice the tax, the mill rate would be cut in half and your tax bill would remain the same. Another way to look at is if the total value of City property increased 50% since the last valuation, and your property did too, your taxes would remain unchanged. Using the same example, in theory if your property increased 60%, you would pay 10% more in taxes and if your property increased by only 40%, you would pay 10% less in taxes.

    How will revaluation affect total taxes collected by the City?

    Revaluation will not affect the total amount of taxes collected by the City; the amount of tax dollars needed is set during the City’s budget process each year. Rather, revaluation affects how taxes will be distributed across properties.

    How will revaluation impact the tax rate?

    The tax rate (also called the mil rate) is calculated by taking the City Council’s approved budget and dividing the amount needed from property taxes by the assessed value of taxable property in the City. Because the City’s approved budget stays the same, any increase in the City’s taxable valuation means the tax rate will go down.

    As explained above though, whether your property taxes go up or down depends on how your property value increased relative to other properties.

    What happens if the City doesn’t implement the revaluation?

    Without revaluation, some property owners will pay more than their fair share of taxes, and others will pay less. But there also are penalties if the City’s valuation used for tax purposes and the State’s valuation have more than a 10% variation, which it is today. And the penalties impact not just City operations, but also people and businesses eligible for various tax exemptions – including homeowners, veterans, paraplegic veterans, people who are blind, and businesses.

    If the City’s valuation remains at 89% of market, as it is today, then we can’t assess property at 100% of value. Being forced to assess properties at less than 100% of value would increase the mil rate to generate the funds needed for municipal, county and school operations.

    But a valuation at 89% of market also would result in financial penalties to people and businesses who are eligible for tax exemptions. This is true because the City would only be allowed to grant 89% of the value of certain tax exemptions– including the value of the Homestead Exemption ($22,250 instead of $25,000), Veteran Exemption ($5,340 instead of $6,000), Paraplegic Veteran Exemption ($44,500 instead of $50,000), Blind Exemption ($3,560 instead of $4,000), and Business Equipment Tax Exemption (varies).

    To learn more about tax exemptions and whether you might be eligible, or if you have other questions about taxes or the Revaluation process, contact the Assessor’s Office at 207-594-0303.