Many taxpayers will see a change in their property's assessed value (which is the value assigned to property for taxation purposes) on the fall tax bill. This revaluation is due to a statistical update.
Why is this revaluation needed now?
Since March of 2020, Peterborough has seen an influx of property buyers, many of whom are able and willing to offer much more than asking price, let alone assessed value.
Ideally, the market value of a property, which is the amount of money that property could reasonably be expected to sell for in a normal, arms-length real estate transaction, is about the same as the assessed value. Annually, the State’s Department of Revenue Administration (or DRA) compares each town’s total assessed property values to actual property sales over the past year. This is done to establish the values needed for the equalization process, which is done to ensure that each municipality is taxed fairly.
On August 4th, 2020, the Select Board was asked if they wanted to update assessed property values to reflect the increased market activity, and they voted to wait, as it was unclear if the pattern was going to be sustained or if it was a short-term effect of the pandemic (click here to access the minutes, packets, and video recordings of past Select Board meetings). Recent market analysis performed by Corcoran Consulting has indicated that the pattern has continued, and those continuing sales - where the purchase price is far above assessed value - has tipped the median ratio, which compares assessed value to market value, down to 71%. The ratio range deemed acceptable by the State DRA is between 110% and 90%. To address this, the Select Board has agreed at the September 7, 2021 Select Board meeting that a statistical revaluation is necessary, as recommended by Corcoran Consulting.
Will my assessment increase? How will this affect my tax bill?
As a result of the revaluation, many property owners will see their assessed values increase. There will be some property owners who see a decrease, and some won't see much of a change at all. The activity of the market is what drives value. Single family homes and condos are expected to see the most significant changes, as those have been the most sought-after properties. Because of the discrepancy between current assessed values and market data, the value of some properties is projected to increase by as much as 40%. This is understandably alarming, however, an increase in property value does not mean that taxes will increase by the same percentage. Typically, when a town’s total assessed property valuation goes up, the tax rate goes down, as long as the annual budget that has been set for town, school district, county, and state is comparable to the previous year.
When will I know if my assessment has changed?
Letters will be mailed out ahead of time to notify property owners of new assessed values.
Once I have the new value, can I use it to calculate what my tax bill will be?
No, not right away, and that's because the tax rate has not yet been set. The State of New Hampshire will calculate the tax rate based on the new assessed value of the town and the municipal, school, county and state budgets, and then will notify the Town prior to the fall tax billing. Once we have the new tax rate, property owners could calculate their annual taxes by multiplying the new rate per $1000 of their property's assessed value.
If I think my new value is unfairly high, can I appeal it?
Taxpayers who think their valuation is unfair can file for an abatement, or reduction, in their assessed value. Applications for abatement may be submitted following issuance of the the fall tax bill though March 1st, 2022. The abatement application, as well as an explanation of the process and timeline, can be found here on our website. Abatement applications are also available in the Administration Offices of the Town House.
Does this have anything to do with the recent web-based theft of $2.3 million?
No. The potential need for the update was identified and then discussed by the Select Board well over a year ago.