Tax Assessments & Fair Market Value

       I probably should say a word regarding published tax figures. Every so often we get someone who looks at them and gets the mistaken idea that they represent fair market value (which is defined as what a willing buyer and a willing seller agree upon in an arm’s length transaction). That is a route that can lead one far astray. I see a lot of properties and sometimes don’t see one a year whose selling price is particularly close to the published assessment. Sometimes they are lower, but far more often any property sells well above assessment figures. The State hopes these assessments will be more accurate than they are, but they run up against – voters. Voters put a lot of pressure on Assessors to keep their numbers low. This pressure is a major headache for assessors and they all have to deal with it.

       Assessors have an obligation to try to keep things relatively fair between the various landowners in a Town and, by and large, they succeed. They do not have an obligation to keep this figure current and it is a whole lot easier on them if they don’t. What an astute landowner needs to keep in mind is not the figure itself but how it relates to other properties within the same tax district. Are you more or less than neighboring properties which are similar? If you are close, the assessor has done their job. You also need to look closely at what is reported on each property. Sometimes new buildings get missed and more often one is removed and the assessors do not notice. It is not uncommon for me to find irregularities where an assessor has missed something.    When I learn of these thing, I make sure the landowner is aware of the problem.
       Our assessors are part-time and the properties that they provide figures for are constantly changing. The struggle to keep current never ends. The State even offers incentives for those that try to keep figures perfectly current but most do not take advantage of this and prefers to keep voters happy instead. Most people do not realize that it takes a certain amount of money each year to run a Town. Part comes from sales tax, some from fines and permits, but most comes directly from real estate taxes. The assessor’s job is mostly to keep things fair and equitable between individual landowners, so no one is taxed relatively higher or lower than his neighbors. Someone else in the Town sets the mill rate. The mill rate multiplied by the tax assessment determines how much we all pay each year. It’s a mistaken notion that your assessment determines how much you pay each year. The mill rate does that. The assessment keeps things fair between landowners. what a landowner pays each year is in constant flux. While the tendency is for this figure to follow inflation, it does go down once in a while and sometimes does not change from one year to the net.
       When there’s a revaluation, people get all up in arms and many get angry at the upward change they receive. But for every upward change, someone else gets a downward one. Those people keep quiet and don’t complain at all. I wouldn’t want to be an assessor. The people you make happy never thank you and everybody else is always on your case.