Revaluation Questions and Answers

Provided by The East Hartford Taxpayers Association (EHTA)

June, 2005

 

•  Does EHTA believe that the Property Tax is a Fair Tax?            NO, the EHTA DOES NOT believe the Property Tax is a Fair Tax!   Like stocks and bonds, your home can increase or decrease in value.   The value of your home is determined through the revaluation process.    Once revaluations are completed and documented in town hall records, your taxes will be based upon the new value of your home.  

This is unlike stocks and bonds.   The government does not tax you on your stocks or bonds unless you realize a financial benefit through a sale or receipt of interest or dividends.      However, the government does tax you on the value of your real estate whether or not you have sold your home and realize a financial gain.  This we define as a tax on unrealized capital gains and believe it is unfair. 

This year we testified at the Capital to restructure the property tax system so that taxpayers only pay taxes on their homes when they are sold.  The proposed Bill failed. 

 

• What happens if I don’t pay my taxes?    The Town of East Hartford will place a lien on your home.   You should make every attempt to communicate with the Town’s Tax Collector if you cannot pay your taxes and attempt to be placed on a payment plan.  Ultimately, if taxes are not paid the Town can institute a process wherein you could lose your home.

 

• What is the EHTA doing for me so we don’t have continued high tax increases?       Taxpayers in Connecticut and throughout the Country are protesting high property taxes and defeating local budgets in the voting booth.  The EHTA worked hard to give taxpayers the right to petition to put our budget on the ballot.  Our ultimate goal is to have automatic budget by referendum as we believe it should be the taxpayers’ right and obligation to determine their tax burden.   To have the budget placed on the ballot, we must collect approximately 4,000 signatures of registered East Hartford voters.  We believe that with the commitment of 200 concerned taxpayers willing to collect at least 20 signatures each, we will be successful in reaching our goal to have the budget put on the ballot the next time the Town Council burdens us with a high tax increase.  Would you be willing to commit to collecting a minimum of 20 signatures of registered East Hartford voters to get our budget on the ballot in the future if we need your help?   It must be recognized that our success in defeating future budgets, relies upon the commitment of several concerned  taxpayers throughout East Hartford. 

 

• What is a Revaluation?        A Revaluation is the process of conducting the Data Collection and Market Analysis necessary to equalize the values of all properties within a municipality for the purpose of a fair distribution of the tax burden.

• How do you define Fair Market Value?  Fair market value is defined as the price established between a willing buyer and a willing seller taking into consideration all the uses to which a property is adapted. Connecticut courts have established criteria which Assessors must use to establish fair market value. 
• What do Assessments have to do with my property taxes?  Connecticut law requires  real estate to be assessed at 70% of fair market value.  Assessments are the base by which municipalities determine the tax burden.     The tax burden is the amount that the Municipality must raise to operate the local government.
• What is the  Grand List?   After individual property assessments have been determined, the Assessor compiles a complete listing of all property. The total assessments of all listed property, combined with personal property and automobiles, is called the Grand List.
• What does Mill Rate mean?        The annual budget determines the amount of the property taxes needed to operate the town. The tax rate or mill rate as it is commonly referred to is determined by dividing the amount of property taxes needed to operate the town by the taxable grand list.
• How is my Tax Bill Calculated?     Your tax bill is your property assessment multiplied by the mill rate.

• What do most of my taxes pay for?   Throughout the 169 towns within the State of Connecticut, between 70% and 85% of municipal budgets pay for government employee salaries, healthcare and pensions.  In East Hartford,  approximately 80% of our budget pays for personnel related expenses.  Many employees fall under union contracts.  Although workers in the private sector have been affected by layoffs, pay freezes or pay cuts, and increased healthcare premiums, town and board of education employees have consistently received wage increases while paying little for their healthcare premium expenses.  Their wage increases and increases in health care premiums and pension premiums are paid for by the East Hartford taxpayers through your tax increases.  

• When will the new assessments be effective?   The revalued assessments will create the October 1, 2006 Grand List. The tax bill you receive in June of 2007 will be based on your new assessment.

 

·         Why do we have revaluation? The State of Connecticut provides the following answer: A general principal of Connecticut’s property tax law is that property should be taxed based on its market value. Specifically, § 12-62a requires assessors to assess all property at 70% of its “present true and actual value. ” In most cases, the trend in the market value of different properties within a town varies based on such market factors as location and condition. For example, home values in one part of town may increase more rapidly than values in another area because of changing qualities of neighborhood schools. Similarly, one part of town may become more attractive than others over time because jobs or shopping opportunities have located nearby. In order to reflect these differences, the law has required towns to periodically revalue property values. This law (CGS § 12-62) has been in effect since 1930, although the frequency of revaluation has changed over time. Under very limited circumstances, a town can skip a revaluation if the trend in market values is very similar across different types of property.

 

• How ofter does the town have to conduct Revaluation?  The State of Connecticut now requires that cities and towns perform a revaluation every five years so that all properties can be brought to current market value and contribute an equitable portion of the total tax burden.   At least one revaluation every 10 years must be conducted by physical inspection; the other may be conducted by statistical means. Individual properties are assessed based comparable sales, the amount of income a property generates, or the cost of replacing the building.  In many towns, the value of residential property has risen more quickly than the value of commercial property, with a consequent shift in the tax burden.

 

·         What is the difference between a Physical Revaluation and a Statistical Revaluation?  In a physical revaluation, the assessor or revaluation company collects information about individual properties from the previous revaluations, building permits, and other sources. For each property, the assessor or company inspects the property to determine its physical condition and to verify information about it.  Through the statistical approach, market information based on real estate sales is used to estimate the value of individual properties. For example, sales data may indicate that three-bedroom, two-bathroom houses with a specified set of amenities in a given neighborhood appreciated by 50% over the 10-year period since the last physical revaluation. This factor would be used to adjust the old valuation data, with the value also adjusted for any modifications made to the property. In practice, assessors and revaluation companies sometimes use physical inspections to augment the statistical approach.

 

·         Will residential homeowners see a greater increase in the value of their homes than commercial property owners?  According to the state, in many towns, residential property values have appreciated more quickly than the values of other types of property. In some towns, the value of commercial and industrial property has been flat or declining, reflecting the obsolescence of older buildings and increasing vacancy rates. As a result, the residential share of the grand list and the share of the tax burden borne by residential property owners has also increased. Partly to address this phenomenon, PA 04-2, May 11 Special Session, allows municipalities that, under prior law, had to revalue real property in the 2003, 2004, or 2005 assessment year to delay revaluation to the 2006 assessment year, if the municipality’s legislative body approves the delay. The expectation is that the delay may allow the values of nonresidential property to “catch up” to the values of residential property, reducing the shift in tax burden.

 

• What is market value and who determines my property value?    Market value is determined by the activity in the real estate market and the general economy. 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. The Appraiser has specific guidelines to follow. Factors that are examined for each property are: Location, size, quality of construction, age of improvements, topography, utilities, zoning restrictions, if any, etc.

• Did the town hire a firm to conduct the Revaluation and what am I paying as a taxpayer for their services?   The Town hired J. F. Ryan Associates at a cost to the taxpayers of $644,080 which is paid for through your property taxes.   
• What is the timeline for the Revaluation Process?    Property inspections and assessments are ongoing.  By May 1, 2006, you will receive a mailing providing statistics on your property.  By November 1, 2006 you will learn the value of your home.   By December 19, 2006 hearings with the Revaluation company will begin if you dispute the value of your home. 
• Do I have to let a Revaluation Inspector onto to my property or into my home?    NO!  You have no legal obligation to allow anyone on to your property or into your home.   They can conduct their inspection from the street.   

• Who do I call if I don’t want someone on my property or in my home?  Can the EHTA help me?    The town is not currently keeping a list of homeowners who do not want the Reval team to gain access to their property.  If you contact Susan Kniep at 524-6501 she will however relay this information to the Town’s assessor and ask that it be forwarded to the Reval team.  This is not a guarantee that someone will not knock on your door at which time you politely tell them they will not be allowed into your home. 

• Will Revaluation increase my taxes?   With residential real estate values increasing, you could see a significant increase in your local property taxes.   

• How will I know if my assessment is equitable?  There are two very good methods of determining this. First, compare your property to similar properties that sold in the previous year. Your value should be in line with these sale prices. Second, if no recent sales are available, compare your assessment to other similar properties in your area using the Street Listing of Values available in the Assessor’s Office. Your value should be in line with these similar properties. Remember, very few properties are exactly alike. Your value should be comparable, but it seldom will be exactly the same as what seems to be a similar property.

• What if I don’t agree with the New Assessment?  Towards the end of the Revaluation process, every homeowner receives a notice of their proposed valuation based on the analysis performed. These values are not final until the hearings are complete. There are three steps available to all property owners, including the right to appeal in court. In the first three steps there is an opportunity to resolve your appraisal disagreement without hiring professional assistance. The three steps are:
  1. An informal hearing held with the Revaluation Company.
  2. An informal hearing held with the Assessor or Assessors' staff.                               3. A formal hearing before the Board of Assessment Appeals. At this meeting legal counsel is not required. Any evidence you may have that may affect your assessment should be presented. The meeting dates of the Board of Assessment Appeals will be announced after the informal hearings are completed.
  4. The final step in the appeals process, should you still disagree with the assessed value, is to appeal to the courts under sec-12-118 of the Connecticut State Statutes provided you have made an appeal to the Board of Assessment Appeals.

• Should I pay my taxes if I choose to appeal? Yes. You should pay your taxes to avoid interest being added and to avoid court costs, including attorney's fees, if your non-payment is referred for collection. Keep in mind that any overpayment found by the court in your appeal will be refunded.

 

• What about the elderly and veterans who may be on fixed incomes or situations where special exemptions might occur?

The Assessor is required by law to assess property and not the people who own it. State law does not permit the Assessor to take matters of hardship into consideration. All property is appraised at fair market value and assessed at 70% of that value. There are, however, State and local programs which provide tax relief for qualifying persons over the age of 65. Other statutes provide exemptions for those who are veterans, disabled, or blind. If you are now receiving an exemption it will be automatically deducted at tax billing time.

·         What is the State tax relief program?   Connecticut law provides for annual tax relief payments for certain homeowners.   You, or your spouse, must be  at least 65 years of age as of December 31, 2004 or you must be over 18 and permanently and totally disabled. Proof of 100% disability from Social Security (form TPQY) required.  You must own the property or hold a tenancy for life or for a term of years, which makes the applicant liable for payment of taxes (CGS Sec.  12-48).  The property must be the applicant’s primary residence as of October 1^st.   Be a permanent resident of the State of Connecticut as of October 1, 2004.   Meet income limits determined by the State.  The 2004 income limits are $33,000 for married persons, $27,100 for single.

• What is the local program?  If you are not presently on the State Program, you may be eligible for the Town Local Option. A person making an application must meet State requirements except for income limits which are set by the Town.  The 2004 income limits are $40,000 for a married couple, $34,100 for a single person. Your assets, excluding the value of your primary residence, can not exceed $100,000.  Residents whose property tax does not exceed 7% of income will not be eligible for this program.  When state and local assistance combined exceed 75% of your property tax, eligibility for this program stops.  The maximum credit is $600 and the minimum is $100.