Submitted by David Weisbrod, BET chairman
The Town recently completed the revaluation of the Grand List. While many residents have seen a significant increase in their property’s assessed value, it is important to clarify how this affects your upcoming tax bill.
Assessment vs. Tax Rate
A common misconception is that a 27% increase in property value equals a 27% increase in taxes. This is not the case. A homeowner’s property tax is derived by:
- The Town Budget – funds needed to operate the Town.
- The Grand List – The total value of all property in Town.
- The Mill Rate – calculated by dividing the Town Budget by the Grand List.
When the Grand List increases significantly due to a revaluation, all else equal, the Mill Rate automatically adjusts downward. Because the total value of the town has grown, the rate charged per dollar of value decreases.
How it Affects You
The average residential assessment increase across town is approximately 27%. Your tax impact is determined by how your specific change compares to that town-wide average:
? Below the Average: If your assessment increased by less than the 27% average, your portion of the tax burden may stay flat or even decrease.
? Above the Average: If your assessment increased by more than 27%, you may see a proportionate increase in your tax bill.
Illustrative Example
The following table shows how a lower Mill Rate offsets a higher assessment, using the town’s current expense base as a guide:
The Takeaway: In this example, despite a 30% increase in property value, the actual tax change is only 3.6%
The math behind this is that a higher grand list results in a lower mill rate. The mill rate for the current fiscal year would decrease from 12.041 to 9.6. This is based on the Town’s current fiscal year budget.
Next Steps
The Board of Estimate and Taxation (BET) will set the final Mill Rate in May once the annual budget cycle is completed. This new rate will be applied to your new assessment to determine your final tax bill.
David Weisbrod
Chair Board of Estimate and Taxation