City Facing ‘Other Side’ of Property Tax Phase-In

It always seems like a good idea, but phasing in property tax revaluations usually ends up with an unpleasant surprise on the other side–as many taxpayers in West Hartford are about to find out.

As explained on the city’s website, West Hartford is now at the end of cushioning the results of the 2006 revaluation. The Town Council decided to phase in that revaluation, but after two years just held the tax rate at the second year’s number—and there’s been no change since 2008.

Now, after the city’s 2011 revaluation, the phase in is gone and the full 70% of market value rate is back.

Which means that even though individual property values may have declined, owners will have to again pay the full property tax rate—with some looking at as much as a 30% increase.

For businesses, residential homeowners and landlords, it’s going to be a confusing—and painful–property tax bill.

Budgets that may already be set based on now-outdated tax assumptions are going to cause some headaches.

Here’s the message on the West Hartford website:

When the 2006 revaluation was completed the Town Council decided to implement a five year phase-in exemption (a gradual increase in taxable assessments and property taxes) for any property assessment that increased more than 25% from the prior revaluation.

After the second year, the Town Council decided to suspend the gradual increase for the last three years of the phase-in and the phase-in exemption was maintained at the year 2 numbers.

Therefore, from July 2007 through January 2012, most property taxes were not based on the full assessment (70% of market value), but rather an assessment which included a phase-in exemption.

With the 2011 revaluation, the phase-in exemption program expired and current property taxes are now based on full assessments. For this reason, taxpayers may see an increase on their property taxes despite a decrease in property value and a lower mill rate.

In this summer’s special session, lawmakers approved a proposal to enable any community in the state to phase-in revaluations for up to five years.

It’s understandable why some towns and cities are seeking the phase-ins. But eventually the bills come due, which can make matters worse. The best solution is more frequent revaluations that provide clarity, certainty and fairness for all taxpayers.

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.