HOULTON, Maine — Taking a novel approach to assessing property values, an Aroostook County town assessor is saving hundreds of thousands of town dollars while helping residents get their full state property tax exemptions.
When decades-old property values and skyrocketing home sale prices pushed Houlton’s property ratios — assessed value compared with sales in the market — below the minimum for full state exemptions last year, Town Assessor Terri Duff decided to tackle a market adjustment project.
Maine requires all municipalities update property values every 10 years to ensure the property tax burden is distributed fairly. For the state’s homestead, veterans and blind exemption programs, the town gets a lower reimbursement when old assessments do not reflect changing market values. That means some Houlton residents don’t get their full exemptions.
Houlton property owners qualifying for state exemptions received only 95 percent of the exemption value, meaning they paid more taxes. The town ratio set by the state was 84.9 percent. The state adds 10 percent to a town’s ratio, giving Houlton a 95 percent ratio. That means the full $25,000 homestead exemption on assessed property value was reduced by 5 percent to $23,650, while the full veterans $66,000 exemption was reduced to $57,000, according to Houlton Town Manager Marian Anderson.
Without this year’s market adjustment in town property values, continuing real estate market growth is pushing town ratios toward 73 percent, Duff said.
“My goal is to get us back up to 100 percent,” Duff said.
Unlike many other Maine towns, Houlton chose not to hire an outside property assessment firm to physically inspect each property, which would have cost $200,000 to $400,000. Instead, with the help of Cornell Consulting of New Hampshire, Duff is using sales analysis studies and assessment information to complete valuations of the town’s 3,100 properties at a current cost of $25,000.
“It is extremely costly to have a full revaluation. There is a substantial cost savings if we can do it this way,” she said.
Often, property owners worry that changing property values means higher taxes, but that is not always the case. As assessed values rise, mill rates decrease.
“A $100,000 property’s new assessment might be $150,000, but their property taxes might stay the same,” Anderson said.
The COVID-19 pandemic ushered in a previously unheard of explosion of property sales in Houlton and around the state.
“In my lifetime, I’ve never seen anything like it,” Duff said.
Most Maine cities and towns must revalue properties to stay current and keep ratios within state bounds.
In 2021-2022 Portland hired Tyler Technologies to complete computer and field-based reviews of properties, the first revaluation in 15 years. Full market property values dramatically increased, but the mill rate dropped from $23.32 to $13.49 per $1,000 of assessed value.
Falmouth and Camden, to name a few, also hired outside assessment firms for total revaluations. Much like Duff, town assessors in Kennebunkport and Biddeford chose to complete market adjustment projects instead.
Detailed Houlton property information is online. This information not only lists the owner and square footage, in-depth property cards include the property’s condition, photos and drawings, acreage, number of rooms, number of bathrooms, basements, garages, year built, renovations, heating and cooling systems, porches and other property features.
For the market adjustment, Duff is using this information along with market sales data to formulate the new property value. The information on the property card must be accurate, Duff said, adding that property condition affects market value.
Duff hopes to keep the information updated annually and eventually have the assessor’s office complete quarterly property inspections to examine quality and condition of properties.
The market adjustment project is slated to be completed this year, and letters will be mailed to property owners about new valuations.
