Residents of Owls Head, a small town in mid-coast Maine, have seen their property tax bills skyrocket this year.
Because the town had not conducted a full revaluation in more than two decades, the tax assessed value of homes has lagged far behind their market value.
“Waiting twenty-five plus years to do revaluations, I think borders on criminal,” said Assessor Jim Murphy during a June 16 Select Board meeting.
The Maine Wire has received messages from Owls Head residents reporting having received substantial valuation hikes this year.
One homeowner said they saw their tax assessed value increase by 200 percent, tripling the tax assessed value of their home. Another saw a 45 percent increase in their home’s valuation by the town.
“Some are going to be disappointed, but the market is the market,” Murphy said last month when addressing the Select Board.
“But if there’s a mistake, we’re going to fix it,” he added, referring to errors such as identifying a home as having three bathrooms when it only has two.
“We should never [have] taxpayers [see] double and triple values,” said Murphy. “You’ve got to fix it somewhere along the line, and that’s what we’re here for, to get a reasonable value on these properties moving forward.”
To ensure that residents don’t experience dramatic hikes like this again in the future, Owls Head intends to update property values every three years.
[RELATED: Sticker Shock — Maine Homeowners Burdened by Property Tax Hikes Following Recent Revaluations]
Despite the sticker shock that many Owls Head residents are experiencing as they receive their new valuations, these changes will not necessarily translate to property tax hikes of the same magnitude.
Revaluations do not serve to increase the amount of property tax revenue generated by a town, instead they change one element of the equation used to calculate how much each property owner contributes in taxes annually.
Property tax bills are calculated by multiplying the tax assessed value of a home by the town’s mill rate.
Mill rates are determined by dividing the town’s budget by the total tax assessed value of property located within their borders. Mill rates can be interpreted as the amount of taxes owed per $1,000 in property value.
This year, Owls Head residents can expect to see their mill rate drop significantly in response to the massive hike in tax assessed values.
Town documents show the current mill rate for Owls Head as 15.5, meaning that taxpayers most recently owed $15.50 to the town for every $1,000 of their home’s tax assessed value.
The exact impact of these new valuations on the town’s mill rate, however, is not yet known.
According to the Midcoast Villager — the local paper that first reported on the town’s substantial revaluations last month — Owls Head has been “factoring” properties for the past two decades by increasing all values by the same percentage instead of revaluating them.
Murphy explained that reliance on this process has only amplified valuation inequities over time, resulting in some areas of Owls Head seeing much larger increases than others.
Owls Head residents will likely be getting more information soon on the impact that these revaluations will have on their specific property tax bills for the upcoming year.
