Eye-popping property tax assessments in Vermont have many residents considering an assessment appeal. Before you file an assessment appeal, you should consider the circumstances and gather as much information as you can about properties that compare to your own. Your assessment may be higher, but it may not be wrong.

Why are Burlington, Vermont tax assessments so high?

 
Burlington, Vermont has hit a perfect pandemic storm. Property values are up because people are paying above a home’s asking price to move here, but property values were also improperly assessed before the pandemic.
 
Burlington had not completed a citywide tax assessment since 2005. Vermont tax officials estimated that those appraisals represented only 80% of the actual fair-market value of properties in the city. This triggered a mandatory reassessment that began three years ago.

Is my Vermont property assessment based on a housing bubble?

 
Some Vermont residents mistakenly believe that the property assessment was conducted during a period of extraordinary growth in home prices brought on by people moving to the state due to COVID-19. In reality, property assessments were well below fair market value before the pandemic began. Assessments have been taking place for three years, so your property may have been assessed before the recent rise in property values.

How can I tell if my Vermont property assessment is too high?

 
Your property assessment should be equal to the fair market value of your property, or what you could reasonably expect to receive if you put it up for sale. If you think your assessment is too high, check the assessments of comparable properties in your area.
 
Do not rely on recent home sale prices or valuations for your neighbors’ homes. Though these are factors to consider, the fair market value of your home depends on its condition and amenities. If you have a pool, your home is worth more than a similar home without one. The number of bedrooms, a finished basement or the condition of your roof can all impact the assessment. Remember that the assessment should be based on the current condition of your home, not its potential value after repairs.

When should I appeal my property assessment in Vermont?

 
Depending on the property and your annual tax payments, it may be worthwhile to file a property assessment appeal if your assessment is 30% higher than comparable properties. It is always worth an appeal if your assessment is 50% higher than comparable prices.
 
Remember that this is not a measurement of the recent increase in your home’s value. Vermont property appraisals are revenue neutral, which means your city or town cannot raise tax income by raising the assessed value of properties. If the value of a community’s properties goes up, the tax rate usually goes down. That 30% rise in the assessed value of your property may result in only a few dollars more in taxes.
 
When a property is improperly assessed, either at a valuation that is too high or too low, an appeal should be filed to bring its valuation in line with similar properties. Most people will not file an appeal for a below-market assessment because they believe they are getting a break on taxes. That “break” could prove costly when they try to sell the property and potential buyers ask why the asking price is far out of range of the assessed value.
Vermont property assessments that are too high leave property owners paying far more than they should in taxes. It is critical to correct overassessments immediately. Once communities become dependent on a certain level of tax revenues from a property, bringing an assessment down can pit property owners against their neighbors as well as assessors. This is a particular concern for owners of large properties and those considering developments.

When are property assessments too high?

 
There are three common things can lead to a property assessment that is too high or too low:
 

• Structural condition. A home or building may have significant structural problems that were not apparent to assessors or that became evident after assessment. Examples of this include structural failure of roofs, cracks in foundations, fire damage or flood damage. The cost of repairs to bring the structure up to code and its suitability for occupancy status should be reflected in the assessment. Documenting these costs as part of an appeal is helpful.
• Easements and access. Assessors must take into account the accessibility, amenities and usability of a property. For example, a lakefront property with no lake access should have a very different valuation than a comparable property with a dock or a beach. Assessors are not always able to identify easements and variances that impact access and use. Documents that describe easements, variances and zoning regulations will help make the case during an appeal.
• Proposed developments or use changes. Development and rezoning can have a material impact on the value of a property. If a major roadway or trail expansion will reduce privacy, or the siting of industrial equipment will impact views, property owners can claim a reduction in fair-market value. This is best done after projects have received their final approval and may be difficult to prove.

When should I hire an attorney for property tax appeals?

 
If you own a large property or require a significant adjustment to the assessment of a large property, you should hire a property tax attorney for your appeal. An experienced attorney may be able to negotiate an agreement with tax assessors to avoid court hearings.
 
Owners of industrial and commercial real estate should also hire an attorney if the value of property or plans for development were impacted by legislative changes, zoning laws or a failure to obtain easements. These cases often become complex and involve multiple municipal government departments that may not understand the relationship between the property’s value and its suitability for a given use.
 
Most residential property owners should be able to handle a property tax appeal on their own, particularly if there are good examples of comparable properties that can be used as a basis to compare assessments. Owners of unusual or exceptional properties should consider hiring an attorney if an assessment is exceptionally high. Waterfront properties, structures of historical significance, structures that no longer conform to Vermont zoning laws and properties with easements appurtenant carrying new assessments 30% or more above other properties in the area can be good candidates for appeals.
 
 
The experienced team at MSK Attorneys will review your assessment and help you determine whether you should file a Vermont property tax appeal. We represent clients throughout Vermont and bring specific experience to cases involving development, Act 250 Permits and easements. Contact us online or call us at 1-802-861-7000.