City-wide revaluation could result in significant tax hike for Nashua homeownersBy KIMBERLY HOUGHTON
Union Leader Correspondent
March 05. 2018 8:31PM
NASHUA — City officials are preparing homeowners for an anticipated hike in their property taxes because of a citywide revaluation process taking place this year.
“We think, on average, residential properties have gone up at least 25 percent in value,” Mayor Jim Donchess said of the past five years.
For the 2018 tax year, officials are predicting the residential property value will jump from $5.3 billion to $6.6 billion and the commercial and industrial values will increase from $3.2 billion to $3.4 billion.
According to Donchess, the average commercial property in the city is currently assessed at about 93 percent of its actual value. He said the city does not want to unfairly increase residential property taxes at the benefit of commercial properties.
“The impact will be more on the moderately priced homes, which is another thing we would like to avoid,” he said, explaining homes assessed around $200,000 or $250,000 have gone up in value more than higher-priced houses.
During 2017, the city collected about $200 million in property taxes — $124.8 million from residential properties and $75.2 million from commercial and industrial properties.
In 2018, it is anticipated that $132 million will be collected for residential properties, with the commercial and industrial properties contributing less at $68 million.
“What could happen here — this shift of $7 million — this could mean that someone’s taxes could go up 10 percent, and that is not what we want to see,” Donchess told the Board of Aldermen last week. “We haven’t even factored in the budget yet. We certainly don’t want to see that.”
The city must undergo a revaluation every five years; the last one took place in 2013.
Although the city requested that the New Hampshire Department of Revenue Administration allow Nashua more time to complete a thorough, full-measure and list revaluation process, Donchess said the agency has denied a request for an extension, meaning the city will be required to conduct a statistical revaluation process instead.
“They want us to do this now. They don’t want to wait to get a more complete job,” Donchess said of the DRA. “They are willing to go to litigation to try to force us to do this.”
John Griffin, chief financial officer, reminded the board that the city lost about $1 billion in assessed value in 2008, coupled with a loss of about $500 million in value in 2013.
“So this is certainly a market correction, but it is going the other way,” said Griffin.
Donchess is proposing that KRT Appraisal conduct the revaluation process at a cost of $500,000. His request will be considered by the aldermanic finance committee.
Donchess said an income-based approach would be taken on commercial property to reflect the true values in an effort to mitigate some of the tax shift onto homeowners.
“I also don’t think the board should overlook the fact that doing this is going to make it a rocky year for the budget,” said Alderman Brian McCarthy, president of the board. “We are going to have to be fairly conservative about budgeting.”
He suggested that some of the city’s surplus and other avenues be considered to help offset some of the tax increase.