FAQ
Q.
What is the Property Tax Levy?
A. Town revenue
comes from several sources: state payments, licenses and
fees, fines etc. All these funds are subtracted from the
budget and what remains is the property tax levy and is paid
by a Property Tax.
Q. What is
the difference between the present Property Tax and the R.I.G.H.T
proposal?
A. Current
property taxes are calculated on market values. This proposal
will calculate taxes based on changes in the tax levy. For
a new owner the initial tax will be the market value, as it is
today.
Q.
Do we have to revalue property?
A. Properties
change value over time. Without revaluation new owners will
pay taxes based on older and usually lower values. Revaluation
provide a fair tax rate based on market values so new owners can
be fairly taxed on current values.
Under the R.I.G.H.T plan only sold property
will need to be revalued, saving thousands of dollars each year.
Q.
As a homeowner, will my taxes be lower under the R.I.G.H.T proposal?
A. For
the majority, most likely yes. Under
the R.I.G.H.T plan if the levy
increases, all owners will get increases but only by the same percentage
as the levy. Today,
with reassessments for everyone, thousands of owners pay lower taxes
which must be made up by the majority who therefore get taxed more
than needed. This
will stop.
Q. What happens when I sell my home?
A. The
buyer and you agree on a price. The first year's tax bill for
the new buyer is based on the current assessed value of the home
and the tax rate in force at the time, exactly like the
present practice. Subsequently new owners become existing owners
and taxes will be levied according to the same percentage guidelines
as for every other property owner.
Q. Won't new buyers resent paying a higher tax than someone
living in a similar house?
A. New
homeowners currently pay the traditional ad valorem tax and
this will not change. People living in similar houses might
pay different taxes, just as we do when we pay our state taxes
and our federal taxes. There is nothing unfair or unprecedented
about it.
Q.
What if I leave my home to my family when I die?
A. Transfer
to a spouse who continues to occupy the property will result
in no change at all. Transfer to anyone else, be they children
or not, will be considered a sale and the property will be
revalued in the same way as any sale.
Q. What if property values decline?
A. Your
taxes will depend on only two things:
1) what your property tax
was last year and
2) how much the tax levy increased.
If
the levy goes up, you and everyone else pay more. If it goes
down, everyone pays less. And the percentage change is the same
for everyone. Once you have purchased your home, any change
in its market value has no effect on on the
Property Owner's Tax. (see next question).
Q. Are home improvements taxed?
A. Improvements
are taxed by adding the traditional ad valorem tax on only
the
improvement to the R.I.G.H.T tax. If a physical
change results in a decrease in value the property
may be reassessed and a new base tax established.
Q. What does progressive mean?
A.
A progressive system places a greater burden on those who have
greater resources.
Q. Is the R.I.G.H.T plan progressive?
A.
Yes and no. Tax bills for people who purchase more expensive
homes are greater than those with less expensive purchases made
at the same time and remain so. On the other hand taxes are not
related to income going forward so progressivity is reduced.
Today's system is not
progressive at all and can even become regressive when
a less costly home rises in value more rapidly than a more expensive
home as frequently happens.
Q.
What makes the R.I.G.H.T plan different from the current system?
A.
The R.I.G.H.T plan difference becomes apparent
after a person purchases his home. Once a fair tax bill is
established, according to the value of the property at
the time of purchase, any future changes in the tax bill, are
in
direct proportion to changes in the tax levy. Everyone
shares the cost and everyone is treated in the same way.
When
the levy increases, everyone's taxes increase by the
same percentage, just like in non-revaluation years. No one's tax
dollars will be used to subsidize someone else's tax bill, as
happens after every revaluation under the current system.