Property taxes in Westbrook might change dramatically for residents next year as a result of a revaluation of all commercial and residential real estate in the city.
The Westbrook City Council will take a vote on authorizing a request for proposals for the revaluation at a meeting on Monday, Aug. 7. The administration is expecting to pay around $160,000 for the upcoming revaluation. According to the administration, the revaluation could begin as early as this fall and be completed in time for tax bills in January 2007.
What the revaluation would mean to Westbrook property owners would vary depending on what value the city currently places on their property. If the property is currently valued at or above its market value, the taxes on the property could decrease or remain about the same. If the city values the property below its market value, the property taxes would likely rise as a result of the revaluation.
The administration is expecting the revaluation will bring a general shift in the overall tax burden away from commercial properties and onto residential properties. Market conditions in the greater Portland area have caused residential real estate prices to rise more rapidly than commercial or industrial real estate, according to City Administrator Jerre Bryant.
“A revaluation is never a thing that somebody wants,” said City Councilor John O’Hara, who added he thinks the property taxes on his home will nearly double after the revaluation. “Unfortunately, it’s something that is state-mandated.”
A revaluation is intended to redistribute the tax burden in a community to make it fair to all property owners, according to Westbrook City Assessor Elizabeth Sawyer.
State law requires that properties in a community be valued at the same percentage of their market value, said Sawyer. The state also requires that a community’s total property value not fall below 70 percent of the established market value.
According to Sawyer, while most properties in Westbrook are valued by the city at about the same percentage of their market value, the value Westbrook places on its total property is at about 60 percent of what the market value is, well below the 70-percent limit mandated by the state.
O’Hara said delaying a revaluation might affect the city’s ability to receive the state funding it relies on for its schools and programs. However, Sawyer said “it’s really more a fairness issue than a fear the state is going to require anything be done.”
Sawyer said it’s too early to tell, but based on what other communities have experienced, she expects about one-third of properties to increase in value, about one-third to stay the same and one-third to decrease. She said a general trend is newer homes tend to be valued higher than older homes and see a decrease in property taxes after a revaluation.
“I think it’s a good thing because a lot of people in the city are paying more taxes than they should be,” said Councilor Mike Foley. “I think this will balance things out.”
Bryant the last time the city valued its total property at 100 percent of what the market value was in 1992, making a revaluation long overdue. The city has performed incremental updates since 1992, but nothing to the scale or expected effect of this revaluation.
The result of that delay is the values of many properties might have changed dramatically since then, and the subsequent change to property taxes for some owners could change dramatically.
“It’s unfortunate that it’s been so long,” said Mayor Bruce Chuluda. “It’s long overdue. For that very reason, it’s going to be quite unpleasant for some residents.”
Chuluda said he’s gotten a number of complaints about unfair property tax rates from owners of newer homes, which tend to have a higher value than older homes.
Chuluda said many of the older homes in the city haven’t been assessed at their true market value and the owners of those homes pay less in property taxes than they should, while owners of newer homes are paying more than they should. Chuluda said he’d be looking to perform more regular revaluations in coming years to reduce their effect.
“I think it needs to be done,” said Councilor Ed Symbol, who agreed doing revaluations more frequently would be better even though they are expensive.
Symbol said he feels bad for homeowners who bought their homes for a low price 30 or 40 years ago and will see a rise in their property values and taxes to the point where they might not be able to afford them anymore.
The city council will take a vote on authorizing a request for proposals to firms that perform revaluations at its next meeting on Aug. 7 at 7 p.m. in room 114 of Westbrook High School.
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