CAPE ELIZABETH — Residents can expect another property revaluation in the coming year, and will see changes to their property tax bills in October 2011 and April 2012.
Town Assessor Matthew Sturgis said the last equalization took place in 2004 and increased the valuation from $763 million to about $1.25 billion. Since then, discrepancies in land and property values have increased and need to be balanced, he said.
“The town’s ratio seems good, but we’ve come to the point over the past seven years where discrepancies between neighborhoods cannot increase any further,” Sturgis said. “The differentials show that some people are paying more and others, less.”
As of Wednesday, April 21, Sturgis said there are about 4,300 parcels in town, and more than 3,500 residential properties. He said the town’s assessment ratio is currently about 78 percent of market value, but the range varies from 60 percent to 84 percent.
“It’s less about whether or not homes are under or overvalued, it is a discrepancy in land values,” Sturgis said. “The goal is to update land values and equalize discrepancies.”
Sturgis said he does not expect the equalization to create as significant a tax rate change as in 2004, when the tax rate went from $22.64 to $14.20 per $1,000 of assessed value, but he said it is likely the rate will decline.
No new revenue is created as a result of a revaluation, but as the town’s value increases, the tax rate decreases, he said.
Other variables must also be considered when trying to predict future tax rates, Sturgis said.
“Adjustments have been made to the state’s general purpose state aid to education, which could change the landscape, as well as revenue sharing and fluctuating outside revenues,” he said. “All these unknowns come into play each year and can affect the overall tax rate.”
The town equalization was going to take place in 2008, but due to an unstable economy and real estate market, Sturgis held off.
“I am really glad I did not do it then,” Sturgis said. “Now, there is much more stability.”
In 2004, the revaluation by an outside contractor cost $36,000. But Sturgis will conduct the upcoming equalization in-house for $19,000. He said the money will be used to verify property information and that data will be used to update records to help with the revaluation.
He will examine a two- to three-year sample of sales, review the sales through field examination, and confirm the data identified in town records. Construction costs, building and land assessed values, and current land values from both vacant land and improved property sales will be updated.
“Doing the project in-house is a way to save a significant amount of money,” he said. “It is a lot of work, but is cost effective.”
Amy Anderson can be reached at 781-3661 ext. 110 or firstname.lastname@example.org