Peterborough tax rate down, but property assessments up

  • The Peterborough Town House Staff photo by Ben Conant

Monadnock Ledger-Transcript
Wednesday, December 05, 2018 5:14PM

Home assessed values are up in Peterborough, so despite a lower tax rate, property owners still may see their taxes rise.

“On average, single-family homes went up, and condos went up,” Nicole MacStay, Peterborough’s assistant town administrator, said Monday.

The Peterborough tax rate is set this year at $30.09 per $1,000 of valuation, down from the 2017 rate of $31.46 per $1,000.

Owners of a property valued at $300,000 can expect to pay a property tax of $9,027. That would be a decrease of about $411, if the property was valued the same amount the previous year. However, most property owners will see an increase in the assessment of their homes this year.

Although the tax rate is down, the 2018 assessed valuation of the town has increased by 12 percent.

Every five years, the town goes through a town-wide revaluation to bring assessed values in line with the current market value. Peterborough’s overall assessed value increased from $625.8 million to $702.3 million.

On average, single-family homes increased by 18 percent. Condominiums increased 25 percent. Commercial properties increased 11 percent.

Chub Whitten, the owner of the Vose Farm Business Park on Vose Farm Road, said Wednesday that the overall assessment for the property is up slightly this year. Most of the assessment changes were in line with his expectations, he said.

“I’m satisfied with some of the assessments, but not all,” Whitten said. “We’re reviewing them at the moment, but there’s not a lot of surprises.”

Whitten said he doesn’t expect the assessment increases to impact the operation of the business park or rent prices for this year, but declined to comment further.

Charlie Cobb, whose family owns the Noone Falls Building on Route 202, said he’s “holding [his] breath” in anticipation of receiving his tax bill, aware that assessments are on the rise.

“We haven’t gotten our tax bill yet, so I just don’t know what it’s going to do,” he said.

Bill Taylor, a real estate agent with the Masiello Group, who also manages a family-owned rental property on Old Town Farm Road, said the increase in the town’s assessment seems out of step with what he’s seen in market sales.

“It’s a huge number,” Taylor said, of the town’s $75 million assessment increase.

One of the homes he has only recently been involved in selling, for example, Taylor said, had its assessment increase by $75,000.

Taylor said the family property he manages, which includes five rental units, has been assessed at $200,000 more than the previous year.

“We’re going to have to do something different, that’s for sure,” Taylor said about the management of his family’s property. “I feel what we’re charging for rent right now is fair, but if the taxes go up much more, something is going to have to change.”

Taylor said the increasing market value of homes and high tax rate are going to make it continually more difficult to attract young singles and families, a long-talked-about goal of Peterborough’s economic development team.

“So many families, including my own, are feeling a strain that is just not sustainable,” Taylor said. “This increase will likely be the breaking point that sends more of our local friends and families that have been in town for decades out. So many of us have spent our entire lives struggling to keep and maintain our properties, but at some point we have to decide if we can continue.”

The pieces of the tax rate

All four portions of the tax rate dropped this year.

The town portion dropped from $11.30 in 2017 to $10.61 in 2018.

MacStay said the Select Board met on Tuesday to finalize the town’s portion of the tax rate. The board voted to use $450,000 of the town’s fund balance to offset a potential larger increase in the town’s portion.

Had the board not applied the unexpended funds, the town’s portion would have been $11.26 per $1,000 of value, MacStay said.

The local school portion of the tax rate dropped from $16.38 to $16.19.

The state school portion of the tax rate also dropped from $2.45 to $2.12.

The county portion of the rate went down from $1.33 to $1.15.

How do TIF districts impact the tax rate?

Peterborough has three sections of town that are classified as Tax Increment Financing, or TIF, districts.

A TIF district works by “freezing” the assessment of a district at the time it’s put into place. From that point on, taxation on improvements or new construction made in the district that increase property value are captured in a separate fund and used to make improvements within that district.

The total assessed value of the Town, including the value of property captured by TIF Districts in 2018 is $721,930,096. In 2017 the TIF districts captured assessed value of $13,793,666. In 2018 the TIF districts will capture assessed value of $19,616,06.

Assessed value is part of the calculation of tax rates, and the higher the assessed value, the lower the overall tax rate.

Normally, each dollar raised by taxation would be split among the four portions of the tax rate – the town, the local school, the county and state education. A TIF district reserves the entirety of that dollar to be spent on town infrastructure improvements.

TIF funds can only be used to make infrastructure improvements within the TIF district.

For example, the current $1.1 million bond to construct a parking lot on Grove Street and a foot bridge connecting the parking lot to Depot Park is being paid by Greater Downtown Peterborough TIF district.

The Greater Downtown TIF district was established in 1998 and is set to expire in 2035, per a 2015 Town Meeting vote that extended the life of the TIF. The West Peterborough district is set to expire in 2025, and the South Peterborough TIF district, established last year, is set to expire in 2038.