Town-wide revaluation gets go-ahead

MOUNT DESERT — Over the past six months, as people from parts of the country with high rates of COVID-19 infection looked for safer places to live, houses on Mount Desert Island have been selling like hotcakes – but at filet mignon prices.

Not only have some houses been selling for substantially more than their assessed value, but also for more – and, in some cases, a lot more – than the asking price.

That has reinforced Tax Assessor Kyle Avila’s belief that it is time for a town-wide property revaluation. The last complete revaluation was in 2007.

“Since then, periodic targeted neighborhood adjustments have been made to stay in line with market values where clear trends were apparent,” he said in a memo to the Board of Selectmen.

“However, a recent boom in the real estate market, escalating construction costs and outdated building information now necessitate a town-wide revaluation.”

The goal, he said, is to gather the information needed to assess property values more accurately “and to smooth out valuation inequities across various property classes.”

The amount of property tax someone owes is based on their property’s assessed value. For the current fiscal year, property owners in Mount Desert pay $8.27 for every $1,000 of valuation.

Avila told the selectmen at their meeting on Monday that he had been making plans to “pull the trigger on a reval” before the recent upsurge in real estate prices.

“Now I’m starting to see sales coming in fast and furious; they are pretty far above assessments,” he said. “So that just reinforced my idea to start the ball rolling on the reval.”

The selectmen approved Avila’s request to hire Vision Government Solutions Inc. for $79,700 to help conduct the revaluation.

“We’ll collect the data next summer, then work on the pricing over the winter so that the new valuations will be implemented in July 2022,” Avila said.

Selectman Geoff Wood said, “Right now, people are pretty touchy about economic situations. Will they get their backs up if they think we’re trying to increase their tax bills?”

Avila said that could happen no matter when a revaluation is done.

“But I don’t think we’re going to see any huge increases or decreases in certain sectors,” he said. “We’re talking about fairly small adjustments.”

Impact on affordability

The current boom in real estate prices could make the lack of affordable, workforce housing on Mount Desert Island more acute.

“There are pros and cons to everything, and generally it’s good to have people move here, but it probably isn’t good for affordability,” said Kathy Miller, executive director of Mount Desert 365, which works to promote economic development and increase the stock of workforce housing.

“This [price surge] is a great boon for some people, people who have had their houses on the market for a while,” she said. “And a bidding war is great for people who are on the selling side. But it could really have a negative impact on housing availability at more moderate prices.”

County taxes to rise?

This year, Mount Desert will pay $997,204 in Hancock County taxes. That is 16 percent of the county budget, even though the town’s year-round population of about 2,200 is only 0.4 percent of the county total.

“Each town’s portion of the county budget is based on its state valuation; population has no bearing on it,” Avila said.

Mount Desert’s total property valuation, as calculated by the state, is $2.1 billion, which is higher than Ellsworth’s or Bar Harbor’s.

With the expected increase in Mount Desert’s property valuation over the next year or two, its county tax bill may well go up. On the other hand, with a larger tax base, the town’s property tax rate might go down, or at least increase less than it otherwise would have.

Dick Broom

Dick Broom

Reporter at Mount Desert Islander
Dick Broom covers the towns of Mount Desert and Southwest Harbor, Mount Desert Island High School and the school system board and superintendent's office. He enjoys hiking with his golden retriever and finding new places for her to swim. [email protected]

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