LIVERMORE FALLS — The town’s certified ratio has been set at 76%, down 18 points from last year’s rate due to the rising real estate market over the past few years.
The certified ratio is the difference between what a town has assessed properties at and what their actual market value is. The ratio is used for tax assessment purposes, including personal property and real estate. It affects the veteran, tree growth and homestead exemptions.
The lower certified ratio means the homestead exemption for homeowners who qualify will be $19,000, not the state maximum of $25,000, assessing agent Paul Binette told selectmen on Tuesday. Last year, the exemption was valued at $23,500 based on that year’s higher certified ratio.
For example, if a mobile home was valued by the town at $25,000, with the full homestead exemption of $25,000 credited to the homeowner’s primary residence, they wouldn’t receive a tax bill. But this year, they will be taxed on a $6,000 valuation. Another example is if a house was valued by the town at $100,000, with the full $25,000 homestead exemption in place the homeowner would pay taxes on $75,000. Under the current ratio, they will pay taxes on $81,000, Binette said.
“We are not alone,” he said. All the municipalities around here have dropped about 10 points. Most, if not all municipalities around the state are dealing with this same issue, he said.
Each year, the state tax assessor conducts a study of the ratio between real estate sale prices compared to municipal assessments. The state’s valuation process has a two-year lag when the ratio becomes final and certified, according to the Maine Revenue Services.
“Our tax assessment system is 24 years old,” Binette said, which means the town hasn’t had a revaluation of properties done since about 1999.
The assessment system should be updated every 10 years, he said. He said it would be up to town officials to decide who would do it.
The town really should have a revaluation done, he said. It is the only way to correct the certified ratio unless the real estate market goes down, he added.
The town is putting money away to pay for the revaluation.
It would cost about $200,000 to $225,000 for a revaluation. There is a wait time to get it done.
Senior citizens who applied and qualified for the Maine Property Tax Stabilization Program will not be affected, Binette said.
The Maine Property Tax Stabilization program allows certain senior citizens to stabilize, or freeze, the property taxes on their homestead, according to a state website.
As long as a homeowner qualifies and files a timely application each year, the tax billed to them for their homestead will be frozen at the amount they were billed in the prior tax year, according to site.
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