When most homeowners hear the words “revaluation” or “reassessment” (used interchangeably), they automatically assume that means their taxes will be going up. In some cases that may turn out to be true, but only if they weren't paying their fair share prior to the revaluation.
Revaluation is the process of assessing property values that uses current market value to replace antiquated and inequitable assessment rolls, many of them decades old. Despite popular belief, the process is revenue neutral, meaning that municipalities do not gain any additional tax revenue. Essentially, the revaluation process takes existing budgets and apportions them on a much fairer basis.
When a town or municipality undergoes a reassessment, they will review the market values of all properties in the community. If many years, or even decades, have passed without a reassessment, some properties will be over-assessed and some will be under-assessed. Because not all properties appreciate at the same rate (due to market conditions, style trends, improvements, etc.), inequities develop over time if the assessments are not adjusted regularly based on current values. For example, two homes that were both valued at $200K twenty years ago many now have very different values, say $400K and $700K. If their assessments haven't been updated, they are still paying the same amount of taxes despite the difference in current value, which clearly is not fair and equitable.
A revaluation does not mean that either your assessment or your taxes will automatically increase. Generally speaking, about one-third of properties see increased assessments, one-third see lower assessments, and one-third stay about the same. Even if your assessment does increase, it doesn't mean your taxes will rise. It's all relative and proportionate to the town's total tax obligation and how it gets reapportioned. For example, if assessments are raised by 20% on average, but your assessment increases by a lesser percentage, your portion of the tax burden may actually decrease.
If your town is undergoing or has recently completed a revaluation, you will receive notice of your new assessment prior to the new tax rolls being published. In considering whether your assessment is fair and balanced, you must consider whether your home could have sold for that amount on the prior July 1st, which is the valuation date for all revaluation projects. If you believe that's at least roughly accurate, you need do nothing. However, if the value is significantly higher than it should be, you can seek a preliminary review with the revaluation contractor or contact a property tax professional. Comparing your assessment with that of your neighbors is not an effective way of achieving a reduction as there's no guarantee that those assessments are accurate or that the properties are identical.
Most municipalities that maintain their assessments at 100% of value (which is what the revaluation process accomplishes) will continue to update their assessment rolls on a regular basis. For example, here in Westchester County, Mamaroneck did their initial revaluation in 2013 and updated it in 2015; Scarsdale did their initial revaluation in 2014 and is preparing to update it in 2016. Currently, the towns of Greenburgh and Ossining will be releasing their full-value assessments via letters to taxpayers in March 2016 which will first affect taxes starting in April 2017. The towns of North Salem and Carmel (Putnam County) will release their values in 2017. Other municipalities that currently maintain their rolls at 100% of value are Pelham, Rye Town, and Bronxville (Village). Yonkers previously proposed a revaluation project but it is currently on hold.
If you have questions on revaluation, please contact us for more information and assistance.
By Gail Fattizzi, Executive Director of Westchester Real Estate, Inc., Lic. Real Estate Broker
(Article written in collaboration with Richard O'Donnell, professional Property Tax Consultant, www.retiredassessor.com)