Middletown CT, fight a 40 percent tax increase 2023

[Account Closed]

Hi all,

I have a single family home I purchased in June 2021 for 200k.

Aside from cleaning up the yard, painting, and new water heater there have been no improvements.

I recently got a letter that my taxes are going up as they believe the property to be worth 225k as of June 2022. 

For Middletown Ct that is quite a market value increase year over year. I checked the town card (it’s right) and the mill rate is unchanged. It’s just the valuation.

If I don’t fight this valuation, I am paying taxes on a higher assessed value than what I bought it for a year ago (they do 5 year assessments) and it’s effectively a 40 percent increase in taxes vs 2017. I feel they should use the transaction value still.

I plan to fight with the fact that the market value was set a year ago and I have similar transactions that are lower from Refin this year and some had more bedrooms!

Anyone in the Middletown ct area ever successfully repeal this stuff?

If not no worries, I will appeal and write back here to tell you all about the experience for the next Middletown ct person! This way I can contribute to this knowledge center.

[Joseph Salzillo]

I'm having the same issue with a 4-unit in Bristol! Taxes are going up from roughly $6800/yr to $9800/yr because of the difference in assessments. Did you go past the time that you can appeal the tax increase with the town? Also, is it the assessed value that's $225k or the appraised value?

I can't argue with mine in Bristol unfortunately because the assessed value still is at that 70% mark and I think it's still less than what it should be... Looks like we have to raise the rents.

[Account Closed]

Hi Joe! I am still in the window and am going to appeal so stay tuned! I hear you on the rents though if I can avoid it I will. The 225k is the implied market value I backed into using the 70 percent rule. It’s just annoying that the actual transaction value from a year ago is so far off!

[Samuel Eddinger]

@Account Closed - that's not how this works.

Both of you are welcome to contest the assessments.  I also just got mine from Middletown and am looking at all of them to see which and how many I want to contest.

In CT, the assessment is used to generate the total grand list.  This is the sum of all the personal property (Car and real estate) in the town.  At this point, they establish the total town budget.  The Mil rate is set at Total town budget / Grand List.  If the grand list grows and the town budget doesn't grow, then the mil rate would go down and your tax would not increase.

With the evaluations going up, this will be a year that the towns push the budget's higher so you will see an increase.  I'm guessing that it will be something like 10% to 20% but definitely not 40%.

The one caveat on this is that for bigger buildings, the assessment is based on income approach, not market approach so they may not be getting assessed as high as the market approach.  In those cases, the taxes could redistribute from larger buildings to smaller buildings (4 units and below).

I own a lot in Middletown and surrounding areas and would be happy to have a conversation with either of you if needed so you know how to play the game.

[Account Closed]

@Samuel Eddinger thanks so much for the offer for a chat and the detail above. I am going to DM you separately.  

[Chris McCormack]

Yes, many people contest the assessments. One thing to look out for is if the market goes down ask for a reassessment. The governments are quick to reassess when values go up, not so much when they go down. 

[Isadore Nelson]

Quote from @Samuel Eddinger:

@Account Closed - that's not how this works.

In CT, the assessment is used to generate the total grand list.  This is the sum of all the personal property (Car and real estate) in the town.  At this point, they establish the total town budget.  The Mil rate is set at Total town budget / Grand List.  If the grand list grows and the town budget doesn't grow, then the mil rate would go down and your tax would not increase.

With the evaluations going up, this will be a year that the towns push the budget's higher so you will see an increase.  I'm guessing that it will be something like 10% to 20% but definitely not 40%.

Do you mind me asking how that works, is there a correlation with how they value the property with how much the town needs to cover their budget? I would assume, that they aren't related but it sounds like they are interconnected, what does one have to do with the other? Shouldn't the values placed on properties be objective regardless of motive to cover budget? Thank you, Samuel.

[Isadore Nelson]

Quote from @Samuel Eddinger:

@Account Closed - that's not how this works.

The one caveat on this is that for bigger buildings, the assessment is based on income approach, not market approach so they may not be getting assessed as high as the market approach.  In those cases, the taxes could redistribute from larger buildings to smaller buildings (4 units and below).

Does that not go both ways? If say the income of a property (basically rent to value ratio) is high, in comparison to market value, then you'd pay more tax accordingly, no? 

[Samuel Eddinger]

Quote from @Isadore Nelson:

Do you mind me asking how that works, is there a correlation with how they value the property with how much the town needs to cover their budget? I would assume, that they aren't related but it sounds like they are interconnected, what does one have to do with the other? Shouldn't the values placed on properties be objective regardless of motive to cover budget? Thank you, Samuel.

It is easier to push a tax increase when the "apparent" value of a home has increased through the reassessment.  When everything is inflating, they can justify being part of that inflation and raise taxes consistently.  It is much harder to push tax increases when we are in a stagnant or even deflationary environment.  A lot of this is based on human nature.  We will complain when property taxes go up, but when everything else is going up too, people are naturally less willing to fight.

[Samuel Eddinger]

Quote from @Isadore Nelson:

Quote from @Samuel Eddinger:

@Account Closed - that's not how this works.

The one caveat on this is that for bigger buildings, the assessment is based on income approach, not market approach so they may not be getting assessed as high as the market approach.  In those cases, the taxes could redistribute from larger buildings to smaller buildings (4 units and below).

Does that not go both ways? If say the income of a property (basically rent to value ratio) is high, in comparison to market value, then you'd pay more tax accordingly, no? 

Every year, for commercial buildings, you have to fill out an income and expense report.  This is used in the determination of how much taxes should need to be paid.  If your property starts doing really well financially, you will be expected to pay more taxes.  I don't know the exact formulas but I do know that this is definitely used in the determination of the tax for the commercial property.