Some Bath homeowners could see tax hikes as the city reassesses homes to align property values with a red-hot market.
The city’s last property revaluation was in 2019. The process is typically conducted every 10 years, according to city Assessor Brenda Cummings. But given the rapid increase in property sale prices during the coronavirus pandemic, many towns are conducting them sooner. Cummings said land and building values for most homes and businesses in the city have increased 27% from 2019 to this year.
“Property values have increased a lot,” Cummings told the City Council. “It requires the 2019 valuation to be updated because it is important that the city maintain what we call a declared assessment-to-sale ratio of 100%”
She said the city’s ratio stood at about 80%, meaning it would lose out on about $600,000 in state property tax reimbursements, requiring a 2.5% property tax hike on top of the 4% increase through the new city budget approved in June. She added the city’s roughly 1,720 property owners with a homestead exemption would see the benefit decrease from $25,000 to $20,000.
To avoid those losses, Cummings said, her office is formulating new valuations based on factors including the 368 home sales in the city from 2020 to 2023 and improvements, such as the addition of a heat pump to a home.
“We studied everything from neighborhood and style of a home to the effect of kitchen and bath quality ratings to ensure all properties were being assessed at a similar level,” she said of the city’s roughly 2,800 residential properties.
Cummings said her office is still working on the reassessment and will complete it before the city commits taxes Aug. 21. She said her office will mail out notices about their new assessments over the next few weeks; property taxes reflecting the reassessment are due Oct. 16. Property owners have 185 days to appeal their assessment.
The reassessment will likely show a significant increase in Bath’s overall property value, which corresponds to a drop in the property tax rate. Some homeowners will see a tax increase, however, if their assessment is particularly high and outweighs the tax rate drop. Home values have increased in Bath at a higher pace than those of commercial and industrial properties, according to Cummings.
The reassessment will not increase the city’s total tax levy; rather, it redistributes the tax burden based on new property values.
Brunswick is currently conducting a similar reassessment that saw some homeowners’ property taxes more than double. It was the town’s first valuation adjustment since a 2017 revaluation. State law requires municipal assessments to average between 70% and 110% of market value, and Brunswick’s assessment was at 58%.
After an outcry from homeowners facing tax hikes, the Brunswick Town Council agreed to review delaying the reassessment until next year to give people more time to prepare. Potential tax hikes in Bath’s reassessment would likely be less dramatic than in Brunswick because Bath’s last revaluation was conducted more recently.
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