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Fiscal Year 2013 Tax Classification Hearing Jan Dangelo, MAA Director of Assessing December 10, 2012.

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Presentation on theme: "Fiscal Year 2013 Tax Classification Hearing Jan Dangelo, MAA Director of Assessing December 10, 2012."— Presentation transcript:

1 Fiscal Year 2013 Tax Classification Hearing Jan Dangelo, MAA Director of Assessing December 10, 2012

2 The purpose of the classification hearing is to determine the percentage share of the tax levy that each class of property will pay. The Board of Selectman must determine a residential factor. The residential factor is used by the assessors to determine the tax levy paid by each class of property and calculate the tax rate. Fiscal Year 2013 Tax Classification Hearing

3 Property Assessment Review Overall, this year residential values were stable and commercial values decreased slightly. Some taxpayers may see a decrease in the assessed value and others an increase. Decreases do not always translate to a tax dollar decrease. Property values are driven by the sales market. Taxes are driven by the Towns budget. The average single family assessment increased from $432,400 to $433,500. This is a minimal increase of only $1,

4 Commercial, industrial, and mixed use property values have decreased slightly. Again, this year there is a slight shift back to residential properties. Property Assessment Review ResidentialCIP Fiscal Year %23.366% Fiscal Year % % Shift % %

5 Classification Percentages

6 New Growth was certified at $67,088,473. Condominiums contributed the largest residential increase. This is a direct result of the condos at South Natick Hills. Single family home new growth decreased. Utility companies contributed greatly with $5,592,863 to our personal property new growth total of $7,880,473. New Growth

7 The maximum levy allowed for fiscal year 2013 is $89,341,857 (This includes the debt exclusion of $4,768,302) Maximum Allowable Levy

8 Levy Limit Calculation TO CALCULATE THE FY2013 LEVY LIMIT A. FY2012 Levy Limit 81,578,625 A1 ADD Amended FY2012 Growth 21,720 B. ADD (A + A1) X 2.5% 2,040,009 C. ADD FY2013 New Growth 933,201 D. ADD FY2013 Override E. FY2013 Subtotal 84,573,555 F. FY2013 Levy Ceiling 155,724,277 $ 84,573,555 $ 84,573,555 FY2013 Levy Limit TO CALCULATE THE FY2013 MAXIMUM ALLOWABLE LEVY A. FY2013 Levy Limit 84,573,555 B. FY2013 Debt Exclusion(s) 4,768,303 C. FY2013 Capital Expenditure Exclusion(s) D. FY2013 Other Adjustment E. FY2013 Water / Sewer F. FY2013 Maximum Allowable Levy $ 89,341,857 $ 89,341,857 MAXIMUM LEVY

9 This years excess levy capacity is $18, This is the difference between the maximum levy and our actual levy. We are at our maximum allowable levy, since increasing the tax rate by one cent would exceed the limit. Levy Limit - Actual Levy = Excess Levy ($89,341,857 - $89,323,445 = $18,412.00) Excess Levy Capacity

10 The minimum residential factor is %. This is the factor that would split the tax rate toward commercial up to 150%. This would increase the commercial tax rate by $7.18 per thousand and reduce the residential rate by $2.17 per thousand. A residential factor of 1.00 will maintain a single tax rate. A residential factor below 1.00 will result in a split tax rate. Residential Factor

11 Classification Impact Examples Please refer to the Options Table for additional information on tax rates the relationship to the residential factor.

12 The board may also adopt a residential exemption of up to 20% of the average residential value. The residential class average value is $376,899. The residential exemption shifts the tax burden within the residential class. It does not split the tax rate. Non-owner occupied and many residential properties would actually pay a higher tax. The residential exemption works well in communities with a high percentage of non-resident property owners such as the Cape and communities with a large number of apartments and rental units. Natick does not have a high percentage of non-resident owners. This exemption does not make sense for a community like Natick. Residential Exemption

13 Residential Exemption Examples Selected Exemption 05.00%10.00%15.00%20.00% Residential Exemption $0$18,845$37,690$56,535$75,380 Residential Tax Rate Commercial Tax Rate AssessTaxTaxTaxTaxTax Owner Occupied Home 400, , , , , , Commercial400, , , , , , Non Occupied Home 400, , , , , , Vacant Land 400, , , , , , Owner Occupied Home 800, , , , , , Commercial800, , , , , , Non Occupied Home 800, , , , , , Apartment2,500, , , , , , Commercial2,500, , , , , ,850.00

14 Fourteen communities* adopted a residential exemption in BarnstableEverettSomerville BostonMaldenTisbury BrooklineNantucket Waltham CambridgeSomerset Watertown ChelseaWest Barnstable Fire *Includes Fire District Owner occupied condominiums in West Natick would benefit most from a residential exemption. Residential Exemption

15 The board may also approve a small commercial exemption of up to 10%. This is only available to businesses that employ less than 10 people annually (as certified by the Department of Labor and Workforce Development) and are valued less than $1,000,000. All businesses at the property must qualify. Approximately 35 properties would qualify. Small Commercial Exemption

16 Ten communities adopted a small commercial exemption in AuburnNew Ashford AvonSeekonk Bellingham Somerset Braintree Westford DartmouthWrentham Adopting a small commercial exemption without classifying taxes would result in an effective tax rate for some commercial properties that is less than the residential rate. Again, this exemption does not make sense for our community. Small Commercial Exemption

17 Single Family Tax Bill Comparison Fiscal Year 2012

18 Tax Rate If Natick maintains a single tax rate by voting a Residential Factor of 1.0; If Natick maintains a single tax rate by voting a Residential Factor of 1.0; The Tax Rate would be: $14.34

19 Lets Talk Taxes.. If Natick maintains a single tax rate, we can expect the following: We have projected an increase to the Average Single Family Tax Bill of $ We have projected an increase to the Average Single Family Tax Bill of $ Naticks Top 10 Commercial Taxpayers will collectively contribute $9,834, in taxes for Fiscal Year 2013 (This includes Personal Property) Naticks Top 10 Commercial Taxpayers will collectively contribute $9,834, in taxes for Fiscal Year 2013 (This includes Personal Property) Note: The Top 10 Taxpayers pay approximately 11% of Naticks Total Tax Levy

20 The board must adopt a residential factor. The board must adopt a residential factor. A residential factor of 1.00 will result in a single tax rate. A residential factor less than 1.00, will result in a split tax rate. Conclusion

21 You may also adopt a residential exemption. You may also adopt a residential exemption. You may adopt a small commercial exemption. You may adopt a small commercial exemption. Typically the exemptions above are found in communities that split the tax rate or that have a large percentage of rental or absentee owners. Conclusion


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