‘View tax’ and value debated at hearingStaff Report
January 23. 2012 10:57PM
CONCORD - State and municipal assessing officials pushed back on Monday against a bill that would eliminate the so-called 'view tax' in calculating a property's value.
The proposed amendment to House Bill 1393, discussed at a hearing of the House Municipal and County Government Committee, would require the market value of a residential property to be based largely on a comparison to sales in the town in the prior two years. If no such sales occurred, those from a comparable nearby community would be used.
In no case, the proposed amendment states, 'shall a separate addition of the value of a view be included in the assessment under the sales comparison approach.'
The bill responds to complaints from homeowners that their property was arbitrarily or subjectively overvalued.
However, current and former assessing officials said the amendment would only generate more aggrieved homeowners.
'If the goal is to have fairness in the property tax system, I would question why would we limit the tools the assessor has to arrive at the proper value for a property,' Robert Gagne, chairman of the Board of Assessors in Manchester, told the panel. 'It's a pretty simple concept. If we can't get accurate data, how we get accurate numbers?'
Gagne noted that the assessing guidelines cited in the amendment, those of the Financial Institutions Reform, Recovery and Enforcement Act, mention the use of view as a factor in calculating value.
Backers of changing the law included property owners who have engaged in years-long disputes with assessing companies and town officials.
One of those testifying was John Mudge of Lyme, whose family owns a summer cottage in Randolph. Mudge produced a thick notebook documenting an eight-year dispute over the assessment for the cottage.
'The view tax is inherently unfair and not applied consistently,'
Mudge said, pointing to the example of a friend who owns less than an acre and got hit with an $85,000 view assessment. 'How does one distinguish that from a $40,000 view?'
David Scott, a former state representative who now consults for the real estate industry and was instrumental in drafting the amendment, said the value of a view is best expressed in the sale price of a comparable property.
'The market is the best discipline we have. We don't need a separate item for view, whether it's of a lake or a mountains or elsewhere,' he said.
Another component of the amendment would bar the use of out-of-state sales to determine the market value of residential property. Scott cited the 'absurd' example of a $5 million appraisal for a home in North Hampton that was based on a comparison to sales in Ogunquit, Maine and Beverly, Mass.
Amendment backers noted that several states, specifically Texas, use mathematical formulas for calculating assessments based on sale prices and other factors, limiting the need for on-site inspections.
Paul Franklin, who served for 35 years on the Board of Tax Land Appeals, insisted such systems weren't right for the Granite State.
'Our soil, our landscape, our livestock is much more variable than other parts of the country,' said Franklin, who noted that he and his wife now operate Riverview Farm, which is assessed for its view.
Stephan Hamilton, director of the property appraisal division for the Department of Revenue, noted that out of 680,000 taxable properties in New Hampshire, there were only about 900 tax appeals each year. 'That doesn't seem like a high failure rate,' he said. The amendment will next go to an executive session of the House committee, which Scott believes will be Wednesday.