The state legislature has passed and sent to the governor a measure that would allow towns the option of delaying property revaluations. Here’s what it means to Monroe and other communities.
If signed into law by the governor, the town legislative body would have to approve a delay in the recently conducted revaluation; otherwise it will take effect as set by previous state law on July 1.
Revaluation of real estate is required by the state every five years. The Town of Monroe’s last revaluation was effective October 1, 2003. The latest revaluation estimates the value of business and residential property as of October 1, 2008.
The legislation in Hartford, SB 997, will give municipalities an opportunity to delay any revaluation for assessment years 2008, 2009, and 2010. In addition, any town in the process of phasing in a previous revaluation may delay the phase-in until the 2011 assessment year.
In Monroe, this means the majority of the nine-member town council would have to vote specifically for or against a delay in implementing the revaluation. The revaluation could be delayed for up to three years.
What are the pros and cons of a delay?
Some residents have reported problems in the revaluation, involving inaccuracies and inequities, particularly as a result of the drop in recent years in home values. About 900 taxpayers have filed appeals of their new property valuations.
A delay in revaluation would mean all those new valuations prepared at considerable expense would have to be set aside.
But there is another downside to a delay. We all have seen a steep drop in home prices, but commercial property in most cases has not declined.
By delaying the revaluation, the town would not be able to benefit from taxes on growth in commercial property values. All the work completed to date and the expenses incurred by the town will be for naught.
In short, property revaluation is a complex and troubling issue for both local and state government, and particularly for taxpayers. In a uniformly rising real estate market, residents easily understand the need to adjust assessments to reflect current market prices.
However, real estate prices since the last revaluation in 2003 have been extremely volatile. Generally, home values rose rapidly through 2003, 2004 and 2005 during the late stages of the real estate bubble.
Since then, home prices have pulled back, erasing much of the increase of previous years. Also, fewer homes have been selling in this soft market, sometimes making it harder to find comparable sales on which to base the value of your home.
Nevertheless, the legislature has recognized the problem and has voted to give towns a choice on how to handle the issue.