What You Need to Know About A Tax Revaluation

Scarsdale Village Trustees are now discussing the possibility of a village-wide real estate tax revaluation, whereby real estates values for all existing properties would be reappraised. A revaluation is a comprehensive update of all property values in the community to ensure that each owner pays only his or her fair share of the tax burden. The last time this was done in Scarsdale was 1968,  42 years ago, and therefore the Village relies on obsolete property valuations. As a result, some over-assessed property owners may be subsidizing those who are under-assessed.

In order to learn more about tax revaluations, Scarsdale10583.com posed some questions to Village Manager Al Gatta who is the Chair of the Westchester County Assessment Commission and an expert on revaluations. Here are his answers:

1. The increase in tax grievances filed in Scarsdale this past year may be an indicator of perceived tax inequities – do you agree? Although there are perceived and real inequities in any property tax system, I feel that the increase in tax grievances has more to do with the current economic and financial climate than with any possible inequities. This item may be confused since most residents advance the argument of unfair treatment in their appeals.

2. Since a revaluation would cost $1.5 -$1.8MM, and the total tax bill for the Village is what it is, how would the village recoup the cost of a revaluation? The Village would not look to recoup their investment for a full revaluation of all properties. The benefits come in more accurate values and equitable treatment for residents. Most people generally confuse a revaluation of property values to mean that more revenue will go to the municipalities. That concept is not so and the amount of taxes that one pays is based on the level of spending. Property is only valued by local governments for one reason; to tax. There are so many different values attached to a property that a person can often be confused. For example, there is market value, 100% equalized value, mortgage value, insurance value and assessed value. Most of the time, each one of these valuations are different since the reason behind each valuation is quite different.

3. In the past, have assessors asked for access into homes to do the evaluation? By law, are residents required to let them in? And if they don’t, how is the house revalued? During a property revaluation, attempts are made to enter each property. Residents are not required to allow an Assessor or a technician from a revaluation team to enter the property. However, if the Assessor is not permitted to enter the home, values are calculated through the use of information available on the characteristics on a property card, realtors descriptions, windshield observations and the context of the neighborhood. If a homeowner, as a result, is not satisfied, of course an appeal can be submitted and at the hearing before the Board of Assessment Review, the Assessor often requests that he/she be allowed to enter the premises. Sometimes it works and when it doesn’t, values in general are not changed.

4. Lee Kyriacou, Executive Director for the N.Y.S. Office of Real Property Services said that when a revaluation is done, typically one third of residents’ taxes go up, one third stay the same and one third are reduced. Is this correct? I agree with Mr. Kyriacou. Having completed three revaluations in the past, two in Hartford, CT and one in Methune, MA, the results were divided in thirds across the board.

5. Are residents compelled by law to accept their new assessment? Can they grieve it? If so, could the Village expect to get a number of grievances to the new assessments? Should a community undertake a property tax revaluation, an expert firm is retained to perform the data collection, research, analysis and valuations. At the completion of a revaluation, which could take up to 18 months, all residents receive what is termed an Impact Notice which provides information that has been collected on the property and the proposed new value. After receipt of the Impact Notice, a resident can schedule an appointment with one of the real estate experts and have an opportunity to correct any inaccurate information and dispute the value. Therefore, the number of grievances can actually decrease after a revaluation.

6. If older residents who have lived in their homes for many years are reassessed, do you expect that many would have to move? Older residents would not have to move after a revaluation since many relief measures exist in the current real property tax law including senior, military and veterans exemptions, income thresholds, phase in of new value and many more.

7. Under a reassessment, would new construction still be assessed at a higher rate than old homes? In regard to new construction, it would be treated in the same manner as all other properties. Once the property characteristics are gathered, analyses are made and various valuations methodologies are applied for all properties. Then a value is obtained.

8. What factors will the Village Trustees consider when making the decision whether or not to do the revaluation? Do you have any idea of the timing? I do not know the factors the Village Board of Trustees would consider when making a decision on whether to initiate a community wide property tax revaluation. It should be cautioned that the Village Trustees are not anywhere close to making such a decision and may never decide to undertake a revaluation. Revaluations for a community the size of Scarsdale could take anywhere from 12 to 24 months;

9. How many people would need to be retained to do it, and how long would it take? There are a few properties revaluation firms in the Country and depending on the number of parcels, a determination would be made as to the number of people involved. The largest number of individuals would be involved in data collection and less involved with the analysis. In regard to valuation methodologies, only a few would be involved as this task requires either a very experienced real estate appraiser, a post 4 or 5 year education in mathematics and/or a post 4 or 5 year education in statistics;

10. Are there other towns in Westchester who have recently done a revaluation who had not done one in 45 years (like Scarsdale?) What can we learn from their experience? The only two communities to undertake a revaluation in Westchester are the Town of Rye and the Town of Pelham. In regard to the experience of those communities, a response is generally influenced by the point of view of the observer. For example, outcomes can be reviewed in regard to fairness and equity, number of grievances, and values as they are carried forward in comparison with other communities by using the measure of the coefficient dispersion. Essentially, results can be looked at from a qualitative and quantitative platform.

Mayor Carolyn Stevens also commented on the possibility of a revaluation. According to Stevens, the Village Board believes it is the right thing to do but is considering the cost as well as resident’s reaction to the $1.5-$1.8 million dollar expense. The Board is weighing the cost of a revaluation against the expense of not proceeding, and they are now compiling the tab for defending the Village against the ever-growing number of tax grievances stemming from perceived inequities.

What is your opinion on a revaluation? Please share your thoughts in the comments section below.