Gary Roberge defends the view tax:
The challenge to pay property taxes continues to decimate the working class in New Hampshire. Incomes have not kept pace with the relentless increase in local and state budgets.
By not voting to eliminate or curtail non-essential spending and by not being vigilant about the spending decisions made by their elected officials, taxpayers only have themselves to blame.
As the owner of a small private company, I understand the necessity of maintaining strict cost control. The elimination of redundant processes and adoption of more efficient procedures always produces positive bottom-line results.
As the struggle to meet increasing budgets continues, taxpayers seek relief by arguing that their property values are too high. Even if the total property value is correct, they will focus on almost any single piece of information to the exclusion of the big picture (total property value) and argue passionately that they are being unreasonably and unfairly taxed.
The current obsession is with the mythical view task. I have read and listened to the concerns and misleading information regarding views and something called the view tax. With all emotion aside, here are the facts:
There is no new tax. New Hampshire pays for local government and public education in large part through the property tax system. This system is based on an opinion of fair market value. For assessing purposes, values are estimated as of April 1.
Market value is the price for which a willing buyer and willing seller, both knowledgeable about real estate and under no undue duress, agree to transfer real estate from one to the other.
In the recent past, market values were simply listed as land value and building value. But just as buyers and sellers have become more sophisticated and seek more detail about what they buy, taxpayers have also demanded more detailed information on how assessed values are developed and what parts make up the total value.
So assessors started looking at market sales the way buyers and sellers did. Assessors started extracting the value of components of the property. Land was no longer simply listed as land and location; it became more detailed and itemized to include items like neighborhood, topography, waterfront, stream frontage, road frontage, privacy and views. Building detail was no longer just square feet of living space but number of rooms, number of bathrooms, bedrooms, style of house, story height, kitchen quality, type of heat, roof style and material.
Assessing property based on market value hasn’t changed. The law requires it. But how the assessed value is being reported on property assessment cards has changed. Now the land is being displayed with more detail. But the total value is still based on local sales data, as it has always been.
This change has come about as a direct result of the public’s desire to understand the property value process better.
Unfortunately, instead of reading individual components as pieces that equal the whole value, the public is thinking upside down. It is interpreting the data as being in addition to the market value.
The media haven’t helped. A few outspoken people have led the public, with the help of the media, to believe that there is a new tax called the view tax, which is added to the full market value of the property. That is simply not true. View is a feature unique to location. It is part of what makes up the total market value. It is not and never has been in addition to market value.
Despite all the rhetoric and sensationalistic press, no one has said his or her assessment wasn’t fair market value or that view doesn’t affect market value. The plain truth is that people simply don’t want to pay taxes on their correct property value. Fair market value is the staple of our property tax system, and it is the only fair approach.
To maintain fair and equitable assessments, based on market value, assessors must follow market trends and extract value for each component of a sale and apply that value to all other properties in the municipality with similar components. This is required by law. It is called maintaining equitable values – treating everyone in the same way.
It is not easy. That is why assessors must be certified (or licensed) by the Department of Revenue and have specialized training, along with a minimum of four years’ experience.
Assessors follow the subjective behavior of buyers and sellers in the market. They don’t create the market or sales data.
Using the sales data and established analytical tools, they identify the value of individual property features that when added up equal the market value (sale price).
Equipped with this information, they assign the market-based feature values to all similar properties in the community. Using this approach, all properties are consistently and equitably assessed.
This does not mean errors will not occur. Assessors are human; they occasionally make mistakes. New Hampshire has a good process for correcting these when they occur: the local abatement process, or, if not there, the Board of Tax & Land Appeals or the superior court.
Gary Roberge of Chichester is CEO of Avitar Associates of NE Inc., a property-assessing company.