Officials from southern Portland are sounding the alarm about a revaluation that is likely to spike home values across the city, in part due to an increase in home sales prices compared to estimated home values.
City administrator Scott Morelli sent a letter to taxpayers last week warning residents of the potential increase and advising that the increases were not due to spending increases in the proposed 2022 budget.
"It will not be uncommon for residential property owners to see tax increases of 10%, 20%, 30% or more even if the city budget remains unchanged," Morelli wrote in the letter.
This week, Morelli said he hoped the letter would help steel residents likely increase their property tax bills significantly.
"In many cases there are people who will be shocked by the tax hike," he said.
The city council is expected to discuss the 2022 budget in a public hearing on Tuesday, April 6th at 6:30 a.m.
Officials said it would take months to know what impact this is sure to be. The city has set up a page on its website stating that since 2019 the city has been conducting an update of commercial and residential real estate values, which state law calls "revaluation" and is necessary in order to comply with the legal mandate meet that citywide real estate values are "fair value" compared to what real estate is being sold for.
City finance director Greg L’Heureux says that houses in the city are now selling at prices well above their estimated values.
"The value of houses in the city is skyrocketing," he said.
City Assistant Jim Thomas said his office is collecting data on home sales in the city to keep up with trends. Monthly data, he said, is not available, but he does offer average annual sales quotas expressed as a percentage – a lower percentage means homes are selling for more than they are valued. The data for a period of 10 years from 2009 to 2019 reflect a downward trend. The data shows that the sales rate was 101% in 2012, but that number has steadily declined since then, dropping to 67% in 2019. That trend, according to L & # 39; Heureux, has continued this year and that is exactly what worried him.
"There are a lot of houses that are selling at 50-70% rates and that is really alarming," he said.
In a presentation to the city council earlier this year, Thomas gave real-life examples of the problem. He declined to list owner addresses or names, but said a home sold for $ 200,000 in 2014, just below the city's current average. In 2019, it sold for $ 286,000. The $ 200,000 price tag five years ago is just under 70% of the price it sold for in 2019. Another home sold for just over $ 182,000 in 2013 and for $ 323,000 in 2019, which is a little over 56% of the 2013 value for six years later.
It's important, Thomas said, because certain state reimbursements, such as those that allow homestead exemptions, depend on that rate being above 70%. This means a citywide revaluation will likely be needed to bring residential property values citywide in line with average home sales prices, L’Heureux said.
According to L’Heureux, the increase is completely independent of the impact of the city's proposed budget for 2022. Even if the proposed budget remains unchanged, the average tax burden on residential property will still increase as the estimated value increases.
Thomas said the city will complete data collection for the current reassessment on April 1, but it will take a few months to process all of the numbers. It's likely, he said, that officials won't know what hikes are imminent for residents until early June.
Morelli said the city is trying to provide some relief in the form of the Tax Rate Stabilization Fund, a fund in the city's annual budget designed to keep tax burdens from fluctuating too much on such revaluations. At the moment, he said, the fund contains $ 1 million but cautioned that tax hikes are likely, though that could mitigate the blow to residents.
" Previous
The New South Portland parent group wants to address racism
similar posts