Uncategorized
Court decision spurs hike in a few Middlebury property assessment
MIDDLEBURY — Around 20 Middlebury taxpayers who used the state’s Homeland Program in acquiring their homes were alarmed last week to see their property assessments rise dramatically to fair market levels following elimination of a formula governing how participating properties are valued.
The Homeland Program allows participating affordable housing organizations — such as the Addison County Community Trust — to grant first-time homebuyers 20 percent (up to $40,000) of a modest home, according to ACCT literature about the program. At closing, the buyer signs a covenant with the Trust, through which the buyer is allowed to realize 25 percent of the appreciation of the home should he or she decide to sell the abode in the future. The Trust purchases the home for the initial price, plus the 25 percent of appreciated value, thereby allowing the home to remain affordable to future purchasers of limited means.
Applicants to the program are pre-qualified to purchase a home within a given price range based on their income, according to the Vermont Housing & Conservation Board. Participants must have a household income below 100 percent of the applicable county median income, adjusted for household size.
Because they are only allowed to realize a fraction of the home’s appreciation upon its sale, those participating in the Homeland Program have seen property assessments that are lower than the fair market rate for similar properties in the community. That caveat has been governed by a formula known as Technical Bulletin 63, which pertains to “valuation of owner-occupied homes subject to resale restrictions,” according to the Vermont Department of Taxes.
But in a September 2013 decision (Franks v. Town of Essex), the Vermont Supreme Court held that when a parcel is subject to a housing subsidy covenant, Vermont law requires an individualized consideration of the effect a particular covenant has on a property’s fair market value.
“Accordingly, there is no automatic reduction in property tax valuation for parcels subject to housing subsidy covenant as indicated in Technical Bulletin 63,” William E. Johnson, director of the Department of Taxes’ Property Valuation and Review Division, wrote in a Nov. 1, 2013, letter to city and town officials following the high court’s decision.
So rather than applying an automatic decrease for Homeland Program properties, Johnson instructed local listers to look at recent sales data for comparable properties within the community to determine whether homeowners were entitled to an assessment break.
“There is no set formula that can be applied in all cases,” he stated in his letter.
Kevin Cosgrove, field supervisor with the ACCT, said the organization has received several calls from affected homeowners, particularly in the Cottage Lane area of Middlebury. He said homeowners are concerned about being able to pay any increased property tax liability stemming from their higher assessments. Officials said some of the property owners saw their property valuations rise by $20,000 to $40,000.
Middlebury Town Assessor Bill Benton said the assessment increase will affect Homeland Program participants for fiscal year 2015, which begins this coming July 1. He said the Legislature has discussed instituting some sort of remedy beginning in fiscal year 2016. In the meantime, Benton believes that many of those affected by the higher assessments will be able to qualify for Act 60-related property tax breaks that could offset the impact of their new assessments.
“If they qualify for these (Homeland) grants, they will probably qualify for income sensitivity,” Benton said.
Reporter John Flowers is at [email protected].
More News
Obituaries Uncategorized
Louise (Husk) Parkinson, 83, formerly of Ferrisburgh
INVERNESS, Fla. — Louise (Husk) Parkinson, 83, died Aug. 15, 2024. She was born in Ferrisb … (read more)
US Probation Office Uncategorized
US Probation Office Request for Proposals
US Probation Office 2×1.5 062024 RFP
Middlebury American Legion Uncategorized
Middlebury American Legion Annual Meeting
Middlebury American Legion 062024 1×1.5 Annual Meeting