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Sunday, March 20, 2011

Property values fall - what does this mean for our taxes?

Adding to Tom’s comments posted last night, everyone in Charlestown has or will be getting the new assessed value of their property. Most likely the assessed value of your house dropped.

According to town Tax Assessor Ken Swain’s data, the highest and lowest valued properties in town dropped by 19-22% while most mid-value properties (from $200,000 to a million) fell between 13 and 15%.

Properties that lost value outnumbered gainers by 10 to 1. Click here to look yourself up and see your 2009 value versus your new number.

Our house dropped by 14%. We own an adjacent house lot which fell by 17%.

Folks – you knew this was coming. Average homeowners all over the country have lost a lot of their home equity because of the national housing crash. Charlestown did not escape the crash, as the numbers clearly show, but we weren't hurt as badly as most..
According to 2009 data, the total taxable property in Charlestown was $2,704,709,800. That’s TWO POINT SEVEN BILLION dollars. AFTER the reassessment, our tax base FELL to $2,309,143,600. That’s a DROP in the tax base of $395,566,200 or -14.6% which is consistent with the notices most town property owners received.

Single-family homes are by far the biggest part of Charlestown’s tax base. There are 4,079 of them that were worth $2,160,995,300 before the reassessment. They contributed the greatest amount of reduction to the total tax base when they FELL to $1,858,926,200. Almost a quarter billion dollars of homeowners' taxable property value evaporated.

Put in the simplest way I know how, property value times the tax rate equals the town's tax revenue. Since we must balance the budget and maintain a healthy surplus, when value goes down, the tax rate must go up.The big question over the next few months will be HOW we make the necessary changes to keep Charlestown fiscally sound through a fair tax system.

Our current tax rate is $7.48 per every thousand dollars of valuation. We just lost almost $400 million in valuation. Rounding the figures, we just lost almost three million dollars in next year's tax revenue absent any adjustments in the rate.

We are going to have to change how property is taxed over the next few months and that is both a challenge and an opportunity. It will be priority #1, maybe even more important than wind mills.

AUTHOR: Will Collette