Read on Twitter
Hey #BTV #VT if you’re a homeowner and you received your reassessed home value in the mail yesterday and you have sticker shock, than this thread’s for you. (Spoiler: you shouldn’t have sticker shock for a number of reasons). A #VTpoli #BTVCC thread. 1/
First if you are shocked at the new valuation of your home, then you haven’t been reading this website or the #BTV interwebs as of late. The #BTV real estate market is on 
. Why is it so hot? Two reasons, one very old and one very new. 2/
. Why is it so hot? Two reasons, one very old and one very new. 2/
The very old reason? @uvmvermont puts massive pressure in the rental market. This causes a “trickle-up” pressure on housing prices AND a “trickle-down” pressure on rental prices. 3/
The very new reason? Historically low interest rates have created essentially “free money.” This has caused a trickle-up and has allowed home owners in large metro areas to sell relative modest homes for $1-2 million dollars (the equivalent of a $300K home in rural #VT). 4/
And has allowed those large metro owners to come into #BTV and "pay cash" for comparatively "cheap" $700K house. Even with historically low interest rates, owners want cash, rather than having to deal with a bank on the other end of the transaction. 5/
However, this has caused pressure on the lower end of the housing market, because a $200-300K house that was once not affordable, becomes way more affordable with a 2.99% thirty year or 2.25% 15 yr mortgage. 6/
Now lets go back a little further. Do you believe in equitable education funding? Well the SCOV's 1997 Bringham decision in part created the situation we are currently in, because it requires 2/3s of your property taxes to be set by the State 7/ https://law.justia.com/cases/vermont/supreme-court/1997/96-502op.html
That means that Montpelier needs to make sure that the education tax rates for every town in Vermont are set using similar methods so that a house in Richford is assessed in the same way as a house in Athens. This is known as the "equalized tax rate" 8/
Let's say all of the residential real estate in Town A is worth 100M. And all of the residential real estate in Town B is worth 25M. If both were at exactly 100% of the equalized tax rate, Town B would pay 1/4 of the education taxes of Town A. 9/
Now unfortunately (or fortunately), the real estate in some towns appreciates at a much faster rate then in other towns. So a house in Town A might have gone from 300K to 750K in 10 years, where a house in Town B might only have gone from 300K to 330K in 10 years. 10/
Here's the confusing part! If a Town's total "grand list" for residential (the value of all the residential properties in our scenario) falls below 80% of its common level of appraisal, then the State "force" the Town to do a "townwide" revaluation/reappraisal/reassessment. 11/
If Town C's Grand List is $95M but the state says it is "really" worth $120M that means the $95M is below 80% of the common level of appraisal (I believe 80% would be $96M) and a townwide revaluation is necessary to bring the Grand List as close to 100% (120M) as possible). 12/
So every property in the municipality (and for our example we are just talking residential) needs to be reappraised at the same time, to bring the Grand List to as close to 100% as possible. So it does not matter if your house was just reassessed for some other reason. 13/
And if your house was just reassessed, remember that was done in somewhat in a vacuum, now the assessor has 100s or even 1000s of other residences to compare to, so invariably the municipal wide reappraisal will result in a "better" number. 14/
So getting back to #BTV specifically. First it is important to note that there has not been a city wide reappraisal since 2005. That's 16 years! The Dow Jones has gone from $10,404 to $33,745 in that time. So don't be surprised if your house has gone up 50, 100 or 200%. 15/
And as another short detour, the stock market is also likely driving the pressure on the real estate market. Oh and do you like the environment? Because #VT has some of the most restrictive environmental regulations regarding new housing development in the country. 16/
Getting back to #BTV (here is where I have to do maths so @lodish check me). Lets say your house WAS assessed at $324,000 in #BTV and that was 77% of the common level of appraisal. The education tax rate gets adjusted by the State since the 77% is not 100%. 17/
So for example this last year the tax rate was 2.0576. That means that you paid $2.0576 for every $100 of value that your house's assessed value. So on your $324,000 house, you would pay $2.0576 x 3240 (which is $324,000/100) = $6,666.63 (that was an unintentional result!). 18/
Here are some real numbers from the Department of Taxes. The 74.77 number means that the average house in #BTV was assessed at 74.77 of the value it "should be assessed at. The 2.0576 is the number above for residences. The $2.1773 is the tax rate for non residential. 19/
Using the numbers from the DoT, lets take a house in Cannan. Their houses were assessed at 112% of the common level of appraisal (which is not great either, the closer to 100% the better) and their tax rate was $1.4736 soooo.... 20/
Our $324,000 house that is assed at only 74.77% in #BTV gets assessed at 112.68% of its value in Cannan so the tax rate of $1.4736 (or taxes of $4,774.46) is proportionately lower BECAUSE OF DIVERGENCE FROM COMMON LEVEL OF APPRAISAL. See next slide 21/
