Large Peterborough assessment hikes shouldn't carry corresponding tax hikes

Monadnock Ledger-Transcript
Published: 11/18/2021 9:33:28 AM

Although residential property assessments have increased 30% to 40%, the increase will likely not be followed by a corresponding hike in taxes.

“A dramatic increase in assessed value does not mean there will be a similarly dramatic increase on the next tax bill,” said Assessing Clerk Alison Kreutz. “If budgets are comparable to last year, then no one should see a gross increase in what their tax bill is. My assessed value went up 41% – I will not see a 41% increase on my tax bill.”

According to Kreutz, property assessments are only one piece of the puzzle that makes up tax bills. The tax rate, which has not yet been set by the state, also impacts the amount residents will pay. 

“And the bottom line each year is the budget,” she said, since it is the ultimate decider of how much money actually needs to be raised, and the assessments and the tax rate are only tools with which to accomplish this. Most importantly, Kreutz said, the budget is ultimately approved by town residents.

Some residents have expressed their concerns about the assessment and their belief that taxes will go up, taking to social media to share their frustrations or calling the assessing office directly to speak to Kreutz about the issue.

“I think I know how they're going to make back that money they were scammed out of,” wrote one resident, Ben Balcombe, on Facebook, sharing that his property assessment showed a 34% increase and referring to the $2.3 million lost by the town in an internet scam in August. 

However, Kreutz said the assessment is actually a response to the need for a statistical update. Reassessment is normally required by the state for every municipality every five years, and she said that “Because of that requirement, even if significant changes in the market don’t trigger a statistical revaluation as in this case, revaluations are inevitable.”

The last revaluation in Peterborough was in 2018, which would normally make the next required year 2023. Typically, these are done in cyclical form, where about a fifth of the properties in town are assessed each year, and the final assessed value is put into place at the end of the five-year period before the cycle begins anew.

But it became necessary to assess the entire town earlier, Kreutz said, due to a trend of increasing sale prices. In fact, she said the Select Board was first alerted to the need in August 2020.

“The board decided to wait because the trend was new, and it was not clear if the pattern was going to persist or if it was a temporary result of the pandemic,” Kreutz said.

The issue persisted this year, and it became necessary for the town to be reassessed.

“This has been on the horizon long before the theft of town funds last summer,” she said.

The New Hampshire Department of Revenue Administration calls for the ratio comparing the municipal assessed value to market value to be between 90% and 110%, found by comparing the most-recent assessed value to records of sales within a municipality, Kruetz said.

Due to market fluctuation, the town’s ratio was down to 71%, meaning that the town’s assessed value is far lower than its actual value.

“As anyone who has bought or sold a house in the area any time in the last 18 months can attest, the market has been very, very active, with a dramatic upswing starting shortly after the pandemic hit,” Kreutz said. “And if the market changes in a noticeable or prolonged way, whether up or down, that’s when statistical revaluations outside of the five-year cycle are considered.”

This means that the cycle has been restarted, since the entire town has been revaluated. But Kreutz said if during that five-year period another market shift occurs in the other direction, this process will begin again to keep the assessment as accurate as possible. 

“This was unprecedented,” she said. But, she added, “Who knows what the future is going to bring?”

Until the tax rate is set by the state, the full impact of the assessment won’t be known, but Kreutz said it is likely to be lower than last year, since tax rates tend to go down when a town’s total assessed value increases. She said she would be surprised if it was not lower than 2020’s rate, $30.84 per $1,000 assessed value. 

“I can’t promise anyone,” she said. “We have to wait for the state, unfortunately, but I would be very surprised if the tax rate was not lower this year than it was in 2020.”

Kreutz said that since many residents are concerned over the assessment, she wants to encourage people to reach out to ask questions about the process. Many people already have called her office with concerns, she said, and have felt better afterward.

“It’s so important that people have an understanding of how this works so they're not suffering any undue anxiety,” she said. 

Those who believe their assessment is unfair can file for a reduction in the assessed value. It must be submitted following the issuance of the fall tax bill through March 1, 2022. The application can be found on the town’s website or in the town’s administration offices.

Monadnock Ledger-Transcript

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