An update of Bath’s property values is expected to be completed next week, and some homeowners likely will face tax hikes due to the sky-high prices in the residential real estate market.
The city will mail out notices the week of Aug. 28 detailing the new property valuations and the tax implications. Property taxes are due Oct. 16; property owners have six months to appeal their new values.
The residential real estate market has outpaced commercial, meaning homeowners will likely take on more of the tax burden. The revaluation adjustment process, which started a year and a half ago, is expected to be finished next week, according to Assessor Brenda Cummings.
“I understand this can be racking for people because values have gone up,” she said. “The most important aspect of my job is to allocate the tax burden as equitable and fairly as possible.
“There’s no place in the state that hasn’t been affected by significant valuation changes, because the pandemic just changed everything. … We’re in a different world.”
The adjustment to the city’s 2019 revaluation was undertaken because the city would lose out on about $600,000 in state property tax reimbursements involving a business equipment tax exemption for Bath Iron Works and the homestead exemption, since they are based on property values.
The reimbursement reduction would equate to a 2.5% property tax hike on top of the 4% increase through the new city budget approved in June. About 1,720 property owners with a homestead exemption would see the benefit decrease from $25,000 to $20,000.
Cummings said she projects the revaluation adjustment would increase property values 17% and decrease the tax rate 17%. About 700 of the city’s 3,500 property owners would see a property tax decrease, while about 1,000 would see a tax hike of up to 5%, about 1,000 would see a tax hike of 5%-10% and the rest would see a tax hike of more than 10%. She emphasized without the adjustment, the city would be facing an across-the-board tax hike of 6.5%.
Cummings said land and building values for most homes and businesses in the city have increased 27% from 2019 to this year.
“I want to make sure we are getting as much as we can from the sources of valuation so we are fairly distributing the tax burden,” Cummings said.
She said communities across Maine are undergoing similar revaluations, like Brunswick, where officials may approve postponing it a year to give homeowners facing steep tax hikes more time to prepare.
Bath is expected to commit taxes Monday, locking in the revaluation adjustment and new property tax bills.
Cummings said the real estate market can always drop and prompt another adjustment.
“Who knows what’s going to happen?” she said.
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