2016 Assessor’s Reval Update to the Town Council

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2016 Assessor’s Reval Update to the Town Council - June 23, 2016

There has been a lot of hype about the new preliminary value notices that were sent out and as a result, here I am to address some common questions/concerns:

 

I just received my notice of value and my taxes have gone up. If they had just provided the average increase in value we could have estimated the potential tax impact

This is not an accurate statement. As indicated in the letter you should not multiply your new value by the old rate as it will produce an erroneous tax amount. Until the update process is complete we will not know the new total value of the Town. Once the total value of the Town is finalized it will be turned over to the Town first and then onto the State with the budget to determine the Tax Rate for the year. Given that we have done the update in 2 phases separating the residential from commercial properties we have no real overall indication of the total increase. Residential values are up in the average range of 10-15%. Some may be less, some may be more. This is merely an average. Commercial/Industrial property values have not been updated yet. They will be done shortly and notices will be sent to the commercial/industrial property owners by the end of July.

 

I would be worrying about the assessment and not so much what a home sold for

This one was a little baffling to me as the entire purpose of revaluing property is to bring it to market value which is done by comparing every property in Town to the sale properties. That is how market value is determined. There has been a tremendous amount of sales activity in Merrimack overall. Since October (6 months preceding the assessment date) there have been 327 qualified sales. Going back to April of last year we have had over 650 sales. The online data has a comparable sales search available that would allow all taxpayers to run this search to determine if their preliminary value is reasonable. Look around at these sales. If a home sells for $425,000 in your neighborhood and your home is of better quality, bigger and has more features, quite simply the assessment will likely be higher. If your home is of lessor quality, smaller or has less features it will likely be assessed for less. While a little more detailed analysis goes into the process this is the simplified way to determine if your assessment seems reasonable.

 

Where is the transparency?

The update process has been discussed multiple times since the last update in 2011. I was in to the Council to discuss the pending update back in November which was a public meeting. Information has also been available on the website. If taxpayers are involved they were aware this was forthcoming. I was also quoted as saying that 2011 was a disaster and I think that has been misinterpreted. The update caused a lot of stir throughout Town as we underwent a software conversion and converted all data from one program  to another, waterfront values were up more than the rest of Town, we changed methodology on the Commons condos and these issues caused concern, however, the job was well done and we had very few abatements and appeals. 2011 saw 276 abatements (2.5%), 2012 we had 90, 2013 we had 48, 2014 20 and 2015 16 and not all of these abatements are value related as we have housekeeping type abatements i.e. Town owned property that was billed and gets abated.

 

The drinking water is bad, properties aren’t selling and the Town manager, Council and DRA have decided to poke the taxpayers and raise values. This is wrong they should have waited and put the update off. Given the scandal why don’t we just do the right thing and lower all values.

Unfortunately, valuing anew cannot be put off as it is mandated by the NH Constitution as well as State Law, specifically RSA 75:8-a which states that all property in the State must be brought to market value at least once every five years and no later. That is this year for Merrimack. If the Town didn’t comply with the Law, the DRA would petition the Board of Tax and Land Appeals and they would have ordered it to be done. Since the water issue was reported we have seen no decline in the number of sales or the amount of sale prices, in fact they have continued to thrive with average marketing in most cases less than 2 weeks. We will however, continue to monitor sales activity throughout this process to see if anything changes. The law does not allow the Town to decide to just lower values, they must be at market value as determined by the local sales.

 

The Town didn’t get what they wanted on vote day so they just raise values so they can collect more money

This couldn’t be farther from the truth. The Town cannot collect any more money than is approved by the voters. The only leeway is the overlay which is money held aside for unforeseen things like abatements, appeals etc. This is limited to a very small percentage of the overall tax burden and whatever is not spent must be turned back to the general fund. This is overseen by the State of NH.

 

I have not made any improvements to my property but my value increased

While the letter indicates improvements on the bottom, this refers to improvements to the land meaning any buildings, features or amenities. This does not mean you have made any improvements to your property, simply the real estate market has changed since the last time we updated values in 2011.

 

I see I have a feature value now that I never had before. Apparently I live in a fancy neighborhood.

These are amenities and they are not new to Merrimack but may be new to your neighborhood. In many of the cluster type subdivisions with small acreage lots, the land value and neighborhood adjustment alone were not properly accounting for the locational value of the neighborhood and in those cases an amenity was added. This was extracted directly from sales in those neighborhoods.

 

Please remind older generations that if they meet the income guidelines they are candidates for tax abatement.

This is not entirely true. The deadline for elderly exemptions was April 15 (as required by law). Income and Assets amounts do apply. All documentation to verify your income and assets must be supplied. You can apply after the first of the year for 2017 providing all of year end 2016 income and asset information. No abatement would apply to this as this is an application for exemption and must follow the State guidelines.

 

You might have a fancy neighborhood but I have a view tax

This one is interesting. All components, whether positive or negative are considered in your assessment, but you no more have a view tax then you have a bathroom tax, a bedroom tax, a shed tax or a garage tax. It’s all a part of the total market value of your property, broken down on an assessment card for ease of review and comparison.

 

I just looked on Zillow and the Assessors must have gotten their values from them

We do not get data from Zillow; these types of websites get their information from public data i.e. us. They then use a multiple regression analysis to compare sale properties against the data listed on your home to arrive at your zestimate. As the analysis tools are similar to a CAMA model like we use in the assessing department it wouldn’t surprise me if values are occasionally similar. They generally use all sales and do not qualify whether they are valid sales transactions or not, hence why their values are often off. Given that we have had fewer and fewer of these distressed type sales their analysis may be getting closer, but I would rely upon it as it is not an appraisal.

 

I went to the site and I am being charged for my shed. Does everyone get assessed for sheds?

Simply, yes. All improvements to the property are considered, whether owned or not. Sheds, deck, pools, garages, carports, etc.  If you allow others to put features on your property i.e. mobile home, garage, shed etc. you will be assessed for it as the landowner as permitted by State law. If you lease solar panels on your roof, they are affixed to the real estate and are assessed as well. They have transmissible value that influences the market value of a home and as such are considered.

 

Put your shed on wheels and build it less than 100sf and you will not be taxed

Again misinformation. If it is sitting on the property on April 1st and remains it will be assessed for the year. I have also heard people concerned that their data is not accurate. They have taken down a shed or pool. The Assessors learn of most improvements through the permit process. If you don’t take a permit we won’t know until we complete the verification cycle and that could be a while. If you demo something you should contact the Assessor’s office. We can then visit and verify. If you have never allowed the Assessor in the home we have no way of knowing if the data is accurate. Set up an appointment and we will come visit, verify and update the records. No inspection, no way to verify and data will remain unchanged.

 

Also, I want to give a shout out to Michael Pelletier. I have no idea who this taxpayer is. I have not paid him, I swear, but he has worked diligently on the MerrimackForum Facebook page responding to and correcting many misstatements out there and for that, I personally thank you. I know it has taken a lot of time and effort and is better received from a fellow taxpayer than the Assessor.

This is a very good process and works well. If you think your value is too high (or too low), please schedule an appointment to come in and review with one of our Assessors. If you think your value is fair but think your taxes are going up that is probably not the basis for an appointment as we will only be focused on assuring your assessment is representative of market value. Taxes will be determined once the update is finalized. The phones were busy Monday but have drastically slowed to a crawl. I myself, called this afternoon and got right through on first try. I thank you all for your patience and understanding through this process.