Reassessments and property taxes
Municipal-wide reassessments are the best way to ensure that assessments are fair and accurate.
During a reassessment, the assessor (or a hired contractor) will review the market values of all of the properties in the community. Based on changes in the real estate market, the assessor will determine which assessments need to be increased or decreased.
Depending on how long it has been since the last reassessment, the assessor may send information requests to property owners and/or do physical appraisals of properties.
Reassessments ensure you pay only your fair share of taxes
After several years without a reassessment, some properties will be over-assessed and some will be under-assessed. This is because some properties will have increased in value, while others may have decreased or stayed the same. Without a reassessment, all of the properties will continue to pay the same amount of taxes. For example:
| Market value 20 years ago | Taxes 20 years ago | Market value today | Taxes today | |
|---|---|---|---|---|
| Property A | $100,000 | $2,000 | $300,000 | $2,000 |
| Property B | $100,000 | $2,000 | $150,000 | $2,000 |
| Taxes collected by town | $4,000 | $4,000 |
Property A and B are still paying the same amount of taxes, even though Property A is worth twice as much as Property B! Property A should pay $2,667 and Property B should pay $1,333. A reassessment will correct this.
Without a reassessment, Property B is actually subsidizing the tax bill of Property A. This is because what one property owner doesn't rightly pay will be paid by other property owners.
Your taxes may increase, decrease or stay the same
Doing a reassessment doesn't mean that your assessment or your taxes will automatically increase.
Market values of properties can increase, decrease or stay the same. The reassessment will ensure that your property is assessed based on current market values (rather than on market values from 20 years, like the example).
If your assessment does increase, it doesn't mean that your taxes will automatically increase. If the increase in your assessment is less than the average increase, your taxes will actually decrease. For example:
- Your assessment increased by 12%
- The average assessment increase was 15%
- Your taxes will decrease (assuming your school and municipal budgets remain stable and the tax levies do not increase)
Reassessments don't increase taxes collected by local governments
The assessor is not responsible for taxes - only for assessments.
Months after assessments are finalized by the assessor, school districts, cities, towns and counties determine their tax levies - how much they need to collect in taxes.
The property tax levy is determined separately from the assessments. The tax levy is then distributed over all taxable assessments.
If assessments increase, tax rates should go down proportionally. This is because the tax levy is now being distributed over a broader tax base. If tax rates go up or stay the same, it simply means that the municipality or school district is collecting more in taxes.
An analogy
If the total amount of taxes collected is a pie, the size of the pie is determined by city councils, town boards, school boards and county legislatures.
The assessor doesn't impact the size of the pie; he or she just ensures the pie is cut up fairly - that taxes are fairly distributed based on current market values
