Another Revaluation in the Works

Though Scarsdale residents have still not paid their first real estate tax bill based on the 2014 Village-wide revaluation, plans are afoot for the next reassessment effective for the June 1, 2016 tax assessment role. This next phase will be a "de novo" or fresh approach and all properties will again be revalued. This may come as a surprise to the 750 homeowners who now have grievance appeals before the court. What it means is that even if the court grants these property owners reductions now, those assessed values will only be in force until the new assessment role is issued. The new valuations will be based on recent sales, not on the current assessments on the Village tax role.

Why now? In order to benefit from the Aid for Cyclical Reassessment Program from the NYS Real Property Services the Village will need to do a reassessment every four years. Though this program will only provide Scarsdale with $29,000 in aid, ($5 per parcel) it is considered best practice for municipalities to conduct regular reassessments and maintain the tax role at 100% of market value.

Unlike the recent reassessment, inspectors will not enter every home to do a physical inventory. Instead, full inspections will be done at newly constructed homes and those that have undergone renovations and additions. Village Assessor Nanette Albanese estimates that 300-400 homes will have interior inspections.

The aid program also requires that every property be physically inspected once every six years. In order to comply, over the next six years the assessors office will view all properties from the street and scan current photos on file.

In order to reassess the entire Village inventory, the Village will use a Direct Market Model Method and a Cost Approach. Using sales data from July 1, 2013 to June 30, 2015 statisticians will formulate a statistical model to predict current market values of all parcels in Scarsdale. The Cost Approach incorporates a land valuation component, an estimate of current improvement costs and depreciation. This data is secondary and only used for unique properties and new construction.

For the recent reassessment, Scarsdale used an Automated Comparable Sales Technique (AVM) along with the Direct Market Model approach. The Village will not use the AVM method for the next reassessment because (according to the Village Assessor) "the public frequently cannot accept that the valuation of their property that was predicted on computer-selected comparable sales that they do not necessarily see as the most comparable; and regardless of the accuracy of the final value estimates, this technique has been shown to produce results that can also vary markedly from the prior year."

The cost for the next revaluation is estimated to be $255,000 that will be paid over three years, with $105,000 from the 2014-15 budget, and $75,000 per year from the 2015-16 and 2016-17 Village budgets. This amount is not exempt from the tax cap, making it even more challenging for the Village to comply with the cap while maintaining services.

Residents and brokers will have to get used to a new tax assessment system where properties are reassessed on a regular basis – making it trickier to predict future assessments. On the other hand, this new protocol will prevent the great inequalities in real estate taxes that existed before Scarsdale's 2014 tax revaluation, which was done after 45 years. Village managers hope that eventually the number of grievances will drop as residents can see how their assessments relate to market value and accept the validity of their valuations.