Burlington officials are working to reassure residents that their property tax bills won’t be skyrocketing, now that many residents received reappraisal notices in the mail, showing their homes’ values had shot up.
Landon Roberts, who lives in the Old North End, saw a $100,000 jump in his home’s estimated value compared to its 2005 valuation. In 2005, the city assessed his house for $210,000. As of 2021, the city says it’s worth $312,000.
“I was pretty shocked,” Roberts said. He said he thought the letter he received didn’t have enough explanation about why home values have risen so much and how, or if, they would affect property taxes.
By law, property reappraisals are based on actual market values, which have risen steadily in Burlington.
“After having sort of gotten over the initial shock and thinking about it more, I don’t think their appraisal is that far off,” Roberts said. “I just don’t think the city did a very good job at all explaining this whole situation.”
The reappraisals are a part of a three-year citywide reassessment of Burlington properties. The last reappraisal Burlington conducted was in 2005. Because the city’s common level of appraisal fell below 80% of fair market value in 2019 — the threshold the Vermont Department of Taxes uses to determine if a municipal reappraisal should be conducted — Burlington was due for a reassessment.
The state’s finding estimated that Burlington’s assessed values averaged less than 80 percent of actual value, and when the difference becomes that large, it’s likely that some properties are overvalued and others are undervalued — which introduces fairness questions around property tax bills.
While property values have gone up astronomically in Burlington’s housing market, city officials say taxes will not, because Burlington’s city charter dictates that reappraisals have to be revenue-neutral.
That means that even if the city’s overall value of property significantly increases, tax rates will not. In 2019, City Assessor John Vickery told VTDigger that Burlington had $3.8 billion worth of taxable property, from which the city collected $33 million of revenue with a municipal tax rate of 88 cents, not counting schools.
At that time, Vickery estimated the reappraisals would increase the taxable property value to $4.8 billion, but the municipal tax rate could drop to 69 cents to keep the reappraisal effects revenue-neutral.
Chief Administrative Officer Katherine Schad told VTDigger the city doesn’t yet know the total property value in the city following the reappraisal, but it’s projected to be above the $4.8 billion estimate.
According to the city’s website, homeowners can calculate their municipal property taxes by taking their appraised home value, dividing it by 100, and then multiplying that number by the municipal, education and local agreement tax rates to determine what each bill will be.
The city has not yet been able to determine what the 2022 municipal tax rate will be because the state Legislature has yet to set the education tax rates.
Burlington Mayor Miro Weinberger said in an interview that the Legislature is projected to set these rates by May or June at the latest, the same time when the City Council is expected to adopt the city’s 2021-22 fiscal year budget.
The city has been receiving many questions about the reappraisal letters sent out earlier this week, Weinberger said. His office has been attempting to quell the confusion by sending an email to residents explaining the reappraisal project and that tax rates will not be rising at the same rates as home values.
He said residents should also know that they have an opportunity to appeal their reappraisal if they think it’s an unfair valuation. Residents can schedule a property evaluation hearing on the city’s website. The deadline to schedule a hearing is April 30.
“We’ll work hard throughout the process to ensure that people do feel fairly treated,” Weinberger said. “But this whole process is about trying to make this important function of local government as fair as possible.”
He said city officials sent many communications and attended public sessions, like neighborhood planning assemblies, to prepare residents for the reappraisal process. Weinberger said the city is working to create a comparison tool that would allow homeowners to understand what their taxes would have been this year under the reappraised values.
New North End resident Kate Charron said she plans to file an appeal because she found that her condo was valued about $4,000 higher than surrounding units that don’t have any major differences from her own. When she bought her condo in 2017, the city appraised its value at $153,000. Charron’s reappraisal letter set her condo at $215,000.
She’s also concerned that the current competitive housing market may be inflating the values homeowners are seeing. Charron said she remembers the city sending out information about the reappraisals but thinks a more widespread marketing campaign could have prevented confusion.
When she first saw the higher value, she thought her taxes would increase until she did some research and found out about the city’s revenue-neutral reappraisal guidelines.
“I’m happy to pay taxes at a fair rate,” Charron said. “I understand we have high property taxes here, and I pay them, you know, because I’m interested in living in a society. But I am also going to be paying close attention because I want to make sure it’s fair.”
The high reappraisal numbers are not only being dictated by Burlington’s booming 2020 housing market, said City Councilor Joan Shannon, D-South District, who is also a real estate agent. She said it’s been 15 years since property was appraised in the city, and all of that pent-up value going back to 2005 is now being accounted for.
She said she’s seen many emails from constituents with questions about the reappraisals. From some of the examples she’s seen, Shannon said, some valuations seem on target but others have inconsistencies. She has pointed some residents in the direction of the appeal process.
Shannon has taken to Front Porch Forum to try to dispel concerns among residents. She supports the mayor’s idea to construct some sort of tax rate calculator on the city’s website, where residents can plug in their property values with a ballpark tax rate to at least give residents an idea about what they might pay.
“I have been trying to communicate this through [Neighborhood Planning Assemblies], Front Porch Forum and discussions with people for probably two years,” Shannon said.
“I feel like when you’re talking about something that is theoretical, people aren’t really tuned in,” she said. “When you hand them a letter that says your appraisal just doubled, that catches their attention.”
