Monday, June 23, 2014

A “Thank You” Call about Pelham’s Property Taxes

I wasn't surprised when Elaine (the Town’s long-serving and extremely dedicated taxation clerk) told me that “John” [not his real name] had called about his residential property taxes. But, I was pleased to learn that he was calling to thank the Town because his property tax bill decreased.

You see, John makes a point of calling the Town every time we send out a tax notice; that means every six months he calls Elaine or me to complain about his taxes.

I understand that John has generally been pleased with Pelham’s modest property tax increases over the years.

For example, the average increase of property taxes on your combined residential property tax bill for each of the last four years was 1.5% (for a four-year total increase of 6.0%). (For the previous four years – from 2007 to 2010 – it was 1.8% (total increase 7.3%).)

At the same time, inflation for the last four-year period was 7.35% or an average of 1.79% per year.

That means that Pelham’s residential taxes increased 1.35% below inflation over the last four years. (Please click here to review the Town of Pelham Residential Tax Increases, 2004 to 2014.)

So what has been John’s complaint?

John called in the past because his property taxes increased greater than the amount we publish each year. For example, in 2011, the average property tax bill decreased by 0.1%, while John’s increased. That meant a hit on his pocket book while others got a break.

How is it possible that he got a break this year, when the average residential property taxes increased by 0.9% in 2014?

Well, the answer is because the 0.9% average increase is only for an average residential property assessed at $298,000 and that increased an average of 2.2% (the average increase of all increases in residential assessment).

But, if your assessed value increases more than the average increase you will pay more than average.

For example, if the assessed value of your home increased by 4% from 2013 to 2014, that’s higher than the 2.2% average, and you would pay more than the 0.9% average property tax increase.

By the same token, if your home is like John’s property and your assessed value increased less than the average – say by only 1% (instead of the 2.2% average) – you will likely pay less property tax this year too!

I want to thank “John” for calling Elaine! Maybe it’s human nature…but most people call to complain, to report something, or to ask for an improvement. Only a generous few thank Town staff and express their appreciation for a program or service. Thanks, “John”!