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HomeMy WebLinkAboutMontana Department of Revenue (5)Dan Bucks Director Montana Department of Revenue Memorandum To: Members of the Montana Legislature Local Government Officials Public School Officials and Other Interested Parties From: Dan Bucks, Director of Revenue Date: August 4, 2009 u u ? AUG 7 2009 D CITY OF LAUREL Z J-Z? Subject: Property Reappraisal Assessment Notices Beginning this week, property assessment notices will be sent to homeowners, commercial real estate owners, ranchers and farmers across Montana. The property owned by these taxpayers represents the bulk of the property subject to the 2009 reappraisal. Notices have already been mailed to owners of mobile homes that are also being reappraised under the six-year reappraisal cycle. All other properties receiving notices this summer business equipment, industrial property, centrally assessed property and mineral proceeds are appraised each year. At this time, we are writing to update you on the progress of reappraisal, and also to provide information that may help you respond to the following questions that you may receive from property owners. What should roe owners do if the have uestions or concerns regard i ntheir assessment notice? Property owners are encouraged to review their assessment .notices carefully. If property owners have questions or concerns regarding the appraisal process, information provided on the assessment notice, or the value assigned to their property, they should contact their local Department of Revenue office. The phone number for the property owner's local office is printed on the property assessment notice. In addition, a statewide listing of local office addresses and phone numbers can be found at the following website: mt. gov/rlevenue/abouttheagency/ofl rcelocations. asp About the 2009 Property Reappraisal What is reappraisal? Reappraisal is the periodic valuation of property for property tax purposes. The Montana Constitution requires that property values in Montana be equalized for property tax revenue.mt.gov A Toll free 1-866-859-2254 (in Helena, 444-6900) A TDD (406) 444-2830 DOR Memorandum August 4, 2009 Page 2 purposes; the Montana Legislature has provided the timelines and the framework by which all taxable properties are reappraised (valued for tax purposes). The Montana Department of Revenue is responsible for appraising these properties statewide to establish their full market (or productivity) value for property tax purposes. What is the reappraisal MLcle? Montana law provides that residential and commercial properties, as well as agricultural and forest land, be reappraised every six years; that is, over a six-year "cycle." For these properties, the new reappraisal values that take effect on January 1, 2009 represent the estimated market (or productivity) value of property as of July 1, 2008. Any change in market value for property tax purposes reflects the change in value from January 1, 2002 to July 1, 2008. All other properties subject to property taxation are appraised annually. What are the statewide average results of the latest reappraisal? The current reappraisal indicates that over the course of the past six years the market value of residential properties increased an average of 55% while commercial properties increased an average of 34%; the productivity value of agricultural land increased an average of 29%, while forest land increased an average of 52%. Reappraisal and Homeowners How can homeowners estimate the impact of rea raisal on their roe taxes? Once they have received their assessment notices, homeowners interested in seeing the estimated impact of reappraisal on their property taxes may do so by visiting the property tax calculator at the following website: mt. gov/revenue,fonndmduals/property/reapproisaitcalculating. asp What is the result of reappraisal on individual homeowners? The impact that reappraisal alone will have on an individual homeowner depends on the percentage change in the market value of the homeowners property relative to the statewide average change for all residential properties. The Montana Legislature passed legislation that generally acts to offset any effect from reappraisal at the statewide average change in market value. This means that if the market value of an individual homeowner's property increased by more than 55%, then the taxable value for that property will generally increase over the six-year cycle; if the market value of an individual homeowners property changed by less than 55%, then the taxable value for that property will generally decrease over the six-year cycle. The Montana Legislature further provided that homeowners who experience extraordinary increases in value, and who are likely to see a tax increase of more than $250, may qualify for additional tax relief if they meet certain household income requirements under the Extended Property Tax Assistance Program. The Department of Revenue has estimated that about 57% of all homeowners will experience a change in tax liability of less than $40-plus or minus-in the first year (2009) of the current reappraisal cycle. DOR Memorandum August 4, 2009 Page 3 Homeowners can see the statewide and by-county average change in property values by property class, and the estimated first-year impact on residential property taxes from reappraisal, at the following website: mt.gov/revenue/forindividuals/property/reappraisallstatistics.asp It is important to note that the department's estimated impacts on property taxes may be different from what property owners actually experience if: • local government and school district budget actions change the applicable mill levy; • the value of other properties in the homeowner's mill levy area change substantially; • the value of the individual property changes due to improvements, or on the basis of an appeal; or • the homeowner qualifies for one of several available property tax assistance programs. When were the values of homes determined for ro tax purposes? The current reappraisal process measured the value of homes on the benchmark date of July 1, 2008. To more accurately track current market trends, the department moved the benchmark date six months closer to the statutory assessment date of January 1, 2009 than in any previous reappraisal cycle. In all previous cycles, the benchmark date was January 1 of the previous year. The Montana Legislature, in HB658 (2009), provided that "sales/assessment ratio studies" will be conducted every two years during the current reappraisal cycle. The Montana Legislature can then examine the results of these studies to determine if legislation is needed to respond to future changes in housing markets. Assessment Notification In order to capture additional. efficiencies in printing and mailing, and to ensure the timely delivery of assessment notices to property owners, the Department of Revenue has revised the assessment notification format from earlier plans. Assessment notices will no longer be delivered in pressure sealed envelopes, but instead will be delivered in regular "window" envelopes. The revised assessment notice can be viewed on the department's website at revenue.mt.gov. Extended Timelln® for Applying for Property Tax Assistance Programs What if a property owner has missed the deadline for applying for groperty_tax relief? The Department of Revenue has extended the timeline for property owners to apply for property tax relief under both the Property Tax Assistance Program and the Disabled American Veterans' Program this year to include the 30-day informal review process. Property owners requesting an informal review of their assessed value may take that opportunity to apply for these tax relief programs during the review process. DOR Memorandum August 4, 2009 Page 4 Tracking the Process Is it possible to track assessment notice mailings and certification of taxable values? Property owners and local government officials can track the progress being made during this year's assessment process by referencing the Department of Revenue's website. Updates pertaining to the schedule for mailing assessment notices can be found at: mt.gov/revenuelfrorindividuals/property/reappraisal4imeline.asp In addition, the Department of Revenue is updating daily on its website a listing of counties for which taxpayer assessment notices have been mailed. Updates pertaining to the schedule for certifying local government taxable valuation can be found at: mt.gov/revenue%rtified taxable values.asp Right to Appeal What if roe owners disagree with the rea raised values of their properties? The Department of Revenue is committed to assessing properties at their fair market value. However, if property owners disagree with the value assigned to their property, they can file an appeal. Most issues can be resolved by requesting an informal review through the local Department of Revenue office. Again, property owners can find their local office phone number printed on their assessment notice. Or, they can refer to a listing of local offices at the following website: mt. gov/mvenue/abouttheagency/officelocations. asp Property owners also can appeal their assessments to the county, or state, tax appeal board. More complete information about the appeal process is provided on the property assessment notice. An example of a property assessment notice can be found at the following website: mt. gov/mvenuelorindividuaWproperly/neappraisaUneceivingnotice. asp