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'McMansions,’ Over-55 Condos, Waterfront Homes Commanding Biggest Tax Increases

With the latest round of property tax bills arriving at Newtown homes in recent days, some local property owners saw fireworks a little earlier than Independence Day. According to local officials, many taxpayers may be facing significant increases in their property taxes now that a new fiscal cycle has begun with its newly set 33.32 mill rate, up from 24.54.

A mill represents one dollar in taxation for every $1,000 in assessed property value.

But some of the largest or seemingly disproportionate increases are falling on three types of homes according to Assessor Chris Kelsey: over-55 condos, waterfront parcels and residences, and high-value properties scattered across town.

First Selectman Pat Llodra, Finance Director Robert Tait, and officials in the tax collector’s and assessor’s offices have all been fielding dozens of calls and visits from sometimes angry and often perplexed property owners wondering how their property taxes jumped so high so fast.

They note that the phenomenon is not exclusive to Newtown.

“Some of these increases are quite dramatic,” Mrs Llodra told The Bee July 2. “And with the increasing personal property taxes, and now an increase in the [state] gasoline taxes, it’s making it incredibly difficult for municipalities and their residents to provide and enjoy a quality of life.”

Mrs Llodra confirmed that after canvassing and regrading 97 percent of all Newtown properties in the early stages of the latest reval process, a state audit of the assessor’s new property valuations have been accepted and deemed fair.

Mr Tait said the state asks for every municipality to submit their “statistical parameters” for updated valuations to certify they are correct. And Mr Kelsey confirmed the state returned his inch-and-a-half-thick binder of valuations with its final approval a few days ago.

“That provides a way to test and gauge the judgment of the assessor about how he graded and valued 97 percent of all Newtown properties,” Mrs Llodra said. “And the state accepted our numbers.”

She added that failure to submit to a valuation review could halt all state aid to Newtown until the data is supplied.

“There is certainly no intent to create an unfair burden on Newtown residents, especially those facing extraordinary or unexpected [property] tax increases,” the first selectman said.

 

Fair Warning

Mr Tait pointed out that several weeks ahead of the deadline for the latest round of assessment appeals, The Bee printed a report detailing the anticipated increase in taxation, and which types of homes would generally see the most significant increases. But until the new mill rate was finally set following the June 4 school budget referendum, it was difficult for people to accurately judge exactly how much their property tax bills would change.

“Once the Board of Assessment Appeals finishes their work and sets the grand list, those values can’t be changed by law — unless the homeowner can illustrate a technical error, like the valuation is applied to a 5,000-square-foot house when that house is 3,000 square feet,” the finance director said.

Mrs Llodra said that in the early stages of reviewing properties for regrading, she understood the assessor was seeing an inordinate number of properties previously graded “C” or average. But when making recent comparisons to similar properties or home characteristics either in the neighborhood, or elsewhere in town, the assessor had no choice but to fix upgrades to properties that were substantially improved compared to others formerly sharing the C grade.

“At the starting point, the assessor determined these grade classifications from the 2007 reval didn’t properly discriminate between the various types and condition of houses,” she said. “Up to now, a lot of those homes had C grades.”

Mrs Llodra also pointed out that in the 2007 revaluation, it was more middle value homes that bore the brunt of significant property tax increases.

“The concept is to equalize the burden based on the [property’s] value in the current marketplace,” she said. “But until that new mill rate was set, it was hard to get a real idea of what the valuation increase meant in dollars, or how those changes applied to similar properties.”

Mr Tait said the revaluation seeks to establish an equitable distribution of taxes based on any changes in a property’s market value.

“But that can create sticker shock when there are unusual or unexpected changes,” Mrs Llodra said. “Residents need to know this happens in every town, whether the tax burden shift is residential to commercial, by building types or locations.”

She said Mr Kelsey and Mr Tait have been working to analyze what has driven the shifts in the latest round of tax burdens, compared to the way certain property types and locations have changed in value over time.

 

Similar Increases Elsewhere

Mr Kelsey said he is talking to assessor colleagues around the area, and the shift in burdens to over-55 condos and waterfront properties is happening everywhere. In many towns, high value homes were also undervalued up to the time of their latest assessment, he is learning.

The assessor is empathetic to homeowners whose deadlines to request assessment appeals was March 20, and who did not have a mill rate to calculate their tax burden until June 5.

“But no matter where the mill rate eventually falls, you have to appeal an assessment, not a property tax,” he said.

Mr Kelsey said among all types of homes he regarded in the early stages of the last reval, it was the McMansions and waterfront homes that he believes finally received fair and equitable assessments.

“We were finally able to get those homes valued where they should be,” he said. “The high value homes were found to be valued comparatively lower in the 2007 reval, so they experienced a disproportionate increase in taxes this year because of those inaccurate revaluations as of October 2007.”

In examining the over-55 communities and condos, Mr Kelsey noted they held their value perhaps more than most properties in the community.

“They did not fall that average 23 percent,” Mr Kelsey said. “Many were relatively new units that are still very desirable in the marketplace.”

He said since there was so comparatively little reduction in those assessments, when the new mill rate jumped, so did the tax bills.

 

Waterfront Properties

Finally, regarding waterfront properties, Mr Kelsey explained that until the current revaluation, none of those homes and parcels were tagged with a “premium value,” even though those owners enjoyed a premium on the properties’ market value.

“We have sales data to back that up,” he said.

He noted, however, that the “premium” percentage is based on the neighborhood where the home is located. So areas with mostly converted modest to midrange cottages would see less of a premium then homes, for example, in the Bridge End Farm neighborhood where virtually every waterfront home was built both recently and to high value specifications.

He illustrated another waterfront phenomenon where a Great Quarter neighborhood waterfront home went down in value, but the premium on the property itself increased its value from $206,000 to $233,000 causing a 50 percent increase in taxation.

Another high value home in the Hattertown area previously valued at $841,000, sold for $1.3 million in 2005. That home sold again in 2012 for $1.35 million, but its valuation jumped to $1.1 million, generating a $27,077 tax bill.

“That homeowner saw their tax bill increase from $14,450,” Mr Kelsey said, “it almost doubled.”

Mr Tait said that across town, 60 percent of residential homes did not receive taxation increases. He said much of the work being done to complete the latest revaluation was done by a regional appraisal firm.

The burden of the bottom line was not lost on the first selectman.

“Unfortunately, especially here in Newtown, it was a terrible time for the reval to hit,” Mrs Llodra said. “I wish the impact was not so severe for some of these home owners. For many (experiencing an increase) it was the worst possible time for these shifts in their valuations to occur.”

More stories like this: Real Estate, assessments, Property Tax

Comments

Short sighted

This increase will likely result in a drag on all property values over time. This could lead to a downward spiral on valuation and steady increase in mill rate. A 35% jump in mill rate all in one go is ill-conceived, the mathematics of the situation notwithstanding. If my search is correct, Newtown may now have the highest mill rate of any town in the county.

Property Tax Increase

I can't say that I didn't see it coming. But for all who wanted the Fairfield Hills Property, the new school additions, extra police and most recently the demolition and building of the SHES, now is the time to pay. No one who voted for or endorsed these burdensome, unneeded expenses should be complaining about a 50% tax hike. This is nothing compared to what will come. For a town of 27,000 people with no major corporate tax payers, this town will shortly be in the same situation as other towns that spent themselves into oblivion. The notoriaty of Newtown put aside, home values have decreased in Newtown over the last five years to the tune of 30% but now we have to pay a higher taxation on a lower valued home? This is borderline criminal, but once again, expected based on what this town thinks it needs as far as schools and police protection. Higher taxes cause a decrease in home values, which causes people to move or avoid moving to town. Which in turn causes a lower grand list, requiring a higher mill rate. Which further depresses home values. See the cycle? Take a look at Bridgeport, Hartford, Waterbury, Brewster or Port Chester, NY. They are text book versions of what happens when property taxation is too high. There is an inverse relationship between home value and tax rates. Everyone should thank the people who voted for all the capital improvements this town "Needed" over the last several years for this ridiculous increase, with no additional increase in services. Enjoy your tax increase.

Unfortunate

It's really unfortunate that Newtown decided to unfairly re-evaluate some homes. It is obvious who the politicians are trying to target. In this economy to have your property taxes increase 2K+ as is the case for many is insane. I was contemplating moving into Newtown from a neighboring town but will definitely not be doing so not considering my taxes would go up 5k. It's bad enough that due to past events people are shying away from moving into town now throw in the crazy high taxes and forget it. I feel bad for anyone in Newtown trying to sell their home ... good luck!! I for one will be looking into another town. Home prices may be higher but I rather pay more monthly for my mortgage than for taxes. Also, it's funny to see houses in Newtown that can't sell for the price they're evaluated for which is so often the case. So sad for the homeowner and so sad for the town.

woe is me...

We didn't want to raise your taxes, blah blah blah. How disingenuous. Oh yes they did, or it wouldn't have happened. Who else raises taxes if it's not the town government officials? They are glad they raised your taxes and they are going to do it again next year, unless you un-elllect them.

You are correct, not

You are correct, not ellecting them could be a solution but it could be a very least solution. The homeowners tax increase case is not only in Newtown but all throughout the country. Some of the Orange County realtors in California have conferences and meetings regarding their clients' complains on the new tax rates. I don't know how homeowners will deal with such taxes.

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