2021 Revaluation and Taxes
What is a revaluation?
A Revaluation is the process of performing all of the necessary Market Analysis and Valuation steps to determine accurate and equitable values for all properties within a municipality. The purpose of a Revaluation is not to raise taxes. It is to create an equitable distribution of the property taxes, based on market value, required to meet the needs of local schools, government and the county.
Does the new assessment reflect the market change over one year?
No. The last revaluation was completed in 2016. The new assessments are reflective of the market as of April, 1, 2021. So the changes seen is the difference between the two appraisal years; 2016 and 2021. We are required to revalue property at least every five years. If there is a need it can be done more often in order to maintain equity amongst various property classes.
Do all assessments change at the same rate?
There are differences between individual properties and between neighborhoods. In one area, the sales may indicate a substantial increase in value in a given year. In another neighborhood, there may be a lesser change in property values.
Different types of properties within the same neighborhood may also show different value changes. For example, one–story houses may be more in demand than two–story houses or vice versa. Older homes in the same area may be rising in value more slowly than newer homes.
Among the numerous factors to be considered that will cause values to differ are location, condition, size, quality, finish areas, garages, and many others.
The other factor to consider is the use of the property. Different classes of property may also increase or decrease at different rates based on economic conditions, supply & demand, etc. For the 2021 revaluation, residential properties are increasing in value at a much higher rate than commercial properties. What ends up happening in this situation is the tax burden shifts more to one class of property. The budgeted amount of taxes still needs to be raised and so the proportion shifts in order to raise the same amount of taxes.
What role or consideration does the prior assessed value play in a revaluation?
The old assessed value is mostly irrelevant. The purpose of a revaluation is to revalue the property based on the sales information, costs, and economic conditions of the market period of the revaluation. Assessments are not changed by a certain percentage; the assessments are actually rebuilt based on the analysis of today’s real estate market.
Existing property information such as building materials and sizes, land area, etc. are reviewed for accuracy and used to form the basis of the assessment. Any adjustments or corrections are made but the main change is to the various cost tables and rates that are applied to the properties.
Nobody inspected the inside of my home so how could it be reassessed?
The Assessing Department maintains a complete record for each property. Information is kept current through permit inspections, sales inspections, periodic re-inspections and exterior reviews. The records are available for review both online and during business hours at the assessing office. This information is used to develop the new assessments.
How can my assessment change when I haven’t done anything to my property?
General economic conditions such as interest rates, inflation rates, and changes in the tax laws will influence the value of real estate. The biggest impact to value is what the general public is willing to buy and sell property for. As time goes by a buyer/seller may be willing to pay/sell more for the same exact property as they would have several years ago. As property values change in the marketplace (sales), these changes are analyzed and used to build new assessments.
What is the “market” and who determines my property value?
The value of your property is based on an analysis of the entire market for a specified period of time before the completion of the revaluation project. The market can generally be defined as, you, the person who sold the property to you, and the person willing to buy it from you. It is the appraiser’s job to research and analyze the values in any particular area or neighborhood. In effect, they do what you would do to determine the selling price when putting your property up for sale. However, the appraiser has specific guidelines to follow during their research. Some factors that are examined for each property are: location, size, quality of construction, age of improvements, topography, utilities, zoning restrictions, if any, etc.
Will a revaluation increase taxes?
A revaluation may result in an increase or decrease of individual taxes depending on how a property value increased or decreased relative to the average change in the City’s assessments. It does not mean that all property taxes will increase or decrease. Remember assessments are only the base that is used to determine the tax burden. The tax burden is the amount that the municipality must raise to operate the local government and support the many services each of us has come to expect, such as schools, police, etc. As an example, if the same amount of money is to be raised after the revaluation as the previous year and each assessment doubles, the tax rate would merely be cut in half.
Is my assessment correct?
The following questions are good questions to keep in mind if you are determining if your assessment is accurate or not.
1. Can I sell my property for that amount? or Would someone pay that amount for my property?
2. Does the Assessing Department have the correct information on my property?
3. How much are similar properties selling for?
4. How are similar properties being assessed?
Assessed Value and the Tax Rate
The Assessing Department does not determine the total amount of taxes collected. The assessor’s primary responsibility is to find the fair market value of your property, so that you are only paying your fair proportion of the taxes in accordance with NH State Law. The amount of taxes paid is determined by applying a tax rate to the assessed value. The taxes are determined by the budgets needed by the municipality, school and county to provide the services of the community.
I understand why my property value went up and know the tax rate went down but why am I still seeing such an increase in my property taxes?
Generally speaking for 2021, with commercial properties increasing in value at a lower rate than residential property this is causing a shift in the tax burden. The same amount of taxes still need to be raised based on the needs and budgets of the city, school and county. A larger portion of those taxes are now being covered by residential owners based on their increases outpacing the rest of the property classes in the City. (Also see FAQ#3)
Approved budgets were increased last year. Taxes would have gone up regardless of any valuation change at least to some extent based on the decisions made by each taxing entity.
Changes may have been made or have since been discovered that were not reflected in the assessment records when the last valuation of the property was done. This may be a result of an error, omission, building permit activity or similar type physical change.
What can I do if I disagree with the assessment?
Abatement request at the local level:
Following the issuance of the final property tax bill, property owners or aggrieved parties may file an abatement application with the Department of Assessment. Applications must be received by March 1, 2022.
Reasons to apply for an abatement include: An error in the assessment, a disproportionate assessment, or a question of law. The burden of proof for the abatement is on the taxpayer. Statements such as “taxes too high” are insufficient to prove an abatement is warranted.
During the review process the Assessing Department may ask to inspect the property.
Every applicant will receive written notice of the decision to either grant or deny the application by July 1, 2022. Further appeal processes will be explained during this time should the owner disagree with the decision and wish to appeal further.