By state law, every five years the town undergoes property revaluation. But while Weston’s reval is scheduled for 2013, Tax Assessor Ken Whitman has started the process now.
Mr. Whitman is busy gathering data from property sales and is submitting questionnaires to home buyers and real estate brokers in order to fairly assess a property’s market value.
He will be assisted in the revaluation process by Vision Government Solutions Inc. (VGSI) of Northboro, Mass. Last month, the Board of Selectmen approved a $44,500 contract with VGSI, which also conducted the town’s property revaluation in 2009.
The assessor’s office determines the assessed value of all real and personal property located in Weston. The assessed value in Connecticut has been established as 70% of the market value as of a specified Oct. 1.
The upcoming revaluation will be effective on the Oct. 1, 2013, grand list and will apply to property taxes payable from July 2014 through June 31, 2015.
The revaluation will not include a full physical inspection this time around, as that was done last time and only needs to be done every 10 years. Still, the reval will be thorough, according to Mr. Whitman.
In the past five years, property sales have been sluggish in Weston and many expect their home values will go down. Although that may happen, it doesn’t mean taxes will go down, too.
“Revaluations are revenue-neutral and do not bring in more revenue or lose revenue for the town,” Mr. Whitman explained. “There is a misconception that when we do a revaluation and there is a significant decrease in real estate values, that when an assessment goes down, the taxes will go down, too. But that is not the case,” he explained.
When calculating the annual town budget, there are many factors that are taken into account, and officials adjust the mill rate — the amount of tax payable per dollar of the assessed value of a property — accordingly. So when property values go down, the mill rate goes up; and likewise, when property values go up, the mill rate usually goes down.
There are a number of factors that go into a property’s revaluation. One key factor is actual sales, Mr. Whitman said.
“We try to find similar properties and compare what they have sold for,” he said.
Each month, Mr. Whitman reviews and analyzes home sales in Weston. The process is complicated because the real estate market has annual “cyclical spikes.” When there are only a few sales in a month, those sales prices may not be reflective of prices in general.
Property sales have declined steadily in Weston. For example, in May 2012, the town clerk’s office recorded seven homes sold, compared to 15 in May 2011.
Town Clerk Donna Anastasia said she has also seen a marked increase in foreclosures and short sales where homeowners are selling their homes for less than the balance of their mortgage.
Mr. Whitman reviews the most up-to-date home sales to see if a selling price was an “arm’s length transaction” at the fair market value, or was adjusted for some other purpose.
“Sometimes the purchase price includes personal property, or the sale is between family members so the price is skewed. We need the most accurate information possible so we can do our analysis,” he said.
The VGSI assessment team will also take into account changes in the real estate market. At this time, Mr. Whitman said, it is necessary to see what happens over the next 15 months before the new reval kicks in.
“The market could increase or it could stagnate more and values could decrease,” he said.
For the last revaluation, which assessed the market in the years 2003-08, the real estate market had a significant increase at the beginning and a decrease at the end so the overall change in market value was fairly insignificant, less than 5% overall, Mr. Whitman said.
For the 2008-13 time period, home values have continually decreased in the languishing economy. Mr. Whitman said he is monitoring home sales to see if the market has hit bottom.
“Who knows? Some areas seem to be picking up. As a homeowner, no one wants to see their property values going down,” he said.
Next spring, Mr. Whitman will start talking to builders to learn more about what kinds of construction they are doing in town.
After the storms last year, he noticed there were a substantial number of permits issued for the installation of generators.
In June, Gov. Dannel Malloy announced an initiative that would allow communitiues to phase in property revaluations for a period of up to five years, even if the value of property decreases. The governor said the phase-in would allow municipalities the “flexibility to blunt the negative impact revaluation sometimes carries.”
The initiative was discussed briefly at a recent selectmen’s meeting, but Mr. Whitman said it would not be applicable or helpful for Weston.
“The initiative would be beneficial to a town that had more of a commerical base, because it would allow a certain class of property to phase in their revaluations,” Mr. Whitman said.
In the case of Weston, which is predominantely residential, the phase-in wouldn’t work well, he said. For example, if one side of town was increasing in value and was allowed to phase in its revaluations, it would mean the residents on the other side of town would have to pick up the slack in the budget.
“I don’t see that happening in Weston,” he said.
To help get an accurate picture of real estate sales, the assessor’s office is sending questionnaires to buyers and real estate brokers to determine if there are any extenuating circumstances involved in a property’s sales price.
“A sales price may seem high, but it may include a boat or another piece of property, so we want to make sure we have all that information as we determine a property’s value,” Mr. Whitman said.
Mr. Whitman is also in constant contact with real estate brokers to find out how sales are going and what they are experiencing. He prints out sales lists and asks them about them. “There are always two sides to things,” he said.
Sales inspections and questionnaires are a major aspect of the revaluation process. “They help us get good-quality numbers. The public’s cooperation is extremely appreciated,” Mr. Whitman said.
For more information about revaluation, call the assessor’s office at 203-222-2606.