By THOMAS P. CALDWELL, LACONIA DAILY SUN
GILFORD — Taxpayers who own waterfront property will be facing higher tax assessments this year, a reflection of what is happening in the local real estate market.
Town Administrator Scott Dunn said Gilford does a “mini-evaluation” each year, reviewing 20 percent of the properties to be sure they are properly taxed.
“We also look at sales data to see if our values are accurately reflected, based on current sales,” Dunn said. “If we find categories of property that are not in sync, we’ll update the assessment as necessary.”
That is what happened with waterfront properties. Recent sales show that waterfront property is selling at higher prices, which makes all waterfront property more valuable. If a town does not adjust the assessments, those who recently purchased waterfront property would be paying higher taxes than the owner of a similar property where ownership has not changed.
Dunn said other categories of property also were affected, with most classes seeing higher values. Some property classes decreased in value.
“Overall, the town is reflective of the real estate market in general, which is on an upswing,” Dunn said.
The New Hampshire Constitution, Part 2, Article 6, requires property revaluations at least every five years to make sure buildings and land are taxed at their actual value. There is no state law to enforce that provision, but towns generally follow the directive for fair assessments.
A full revaluation, which reviews every property, is costly and time-consuming, so many towns, like Gilford, break the task into yearly partial updates. They do “pick-ups” to add new construction and major renovations to the tax base, and usually do statistical updates to adjust all property values to reflect current market values.
By doing 20 percent each year, the town will have reviewed every property at the end of five years.
“Our goal,” said Dunn, “is always to be as close to 100 of the fair market value as we can be, so in addition to doing 20 percent of the properties on the cycle, we look at specific sections to get them to 100 percent.”
An increased town assessment does not necessarily translate into higher taxes. If most properties are increasing in value, and spending remains the same, the tax rate will drop. If all properties rise at the same rate, the actual tax bill will be unchanged. When some classes of property rise significantly and others change by lesser amounts, the high-valued properties will see an increase, while the others may see a decreased tax bill.
Even if the net assessed valuation of the town increases, taxpayers may not see an equal reduction on their tax bill if municipal spending has increased since the previous year. All of the factors are dynamic, and each one may change the outcome. Additionally, when the New Hampshire Department of Revenue Administration sets the tax rate, it will factor in state and local education costs as well as the county appropriation.
“We try to adjust things that are out of whack every year so there is not a huge spike,” Dunn said.