Letter from the Assessor: Market Value vs Revaluation

     Over the last three years we have all borne witness to house prices skyrocketing. The thought has run through all our minds, “I wonder how much I can get for my house today?”. Our next thought is “But where would I go if I sold my house? I can’t afford to buy, or even rent, with today’s prices.” This is the ‘market’ of today. Market Value. Good ol’ Supply and Demand. Sellers (supply) set the prices, and Buyers (demand) are willing to purchase at that price. Buyers can influence price by staying out of the market until prices decrease – yet buyers continue to purchase at these increased prices. Due to the lack of inventory (supply) in Chester, those few houses that become available for sale are selling for much higher than expected (demand). Additionally, increased costs of materials, supply chain distribution, labor shortages and a steady rise in interest rates are simultaneously affecting the market (supply).

     So how does this affect Chester Residents? The answer is: Revaluation. The State of Connecticut requires municipalities to conduct a town-wide revaluation every 5 years. The purpose of a revaluation is to correct any inequities in assessment values that may develop over the 5-year period. Chester’s state-mandated Revaluation is effective October 1, 2023 (Grand List year 2023, payable in July 2024). Revaluation means determining the market value of all real property to establish the tax base and ultimately equalize the tax burden within that Town. All real estate sales that occurred in Chester will be used in determining the market value of your property. The value determined for the 2023 Revaluation will be your property’s assessed [tax based] value for the next five years (provided no changes occur on your property within that five year period).

     It is important to note that the last Revaluation in Chester was 2018, in other words your property’s current taxable assessment is based on the market value as of 2018 (pre-COVID). Yes. Your home’s value will most likely increase for the 2023 Revaluation, as the market value of your property has increased.

     According to Redfin.com housing prices (market value) have increased over 50% in the last five years. This is good news! You purchased a home a few years back, meaning you have invested in the real estate ‘market’. Well, the value of your investment, your asset, has now increased. Congrats! You made a good investment decision.

     What is not fun is paying taxes. We can all agree on that. And unfortunately, in Connecticut, our taxes are based on value (ad valorem). We don’t have to like it, but we do have to understand that this is the State we choose to live in, and these are the laws in our State.

     If you take away anything from this letter, let it be this: tax bills do not increase based on your assessed value alone.  A property’s assessed value multiplied by the Town’s annual mill rate determines your property tax bill. The mill rate is dependent on the Town's annual budget and is determined by the Town’s governing board then ultimately voted on by you, the taxpayers of Chester, in a Town Meeting forum. Residents are highly encouraged to get involved, understand and vote on the Town’s budget and mill rate as the outcome directly affects you and your pocket [tax bill]. Town meetings are listed publicly on the Town’s Website and in the weekly emails to residents.

For additional information regarding Chester’s 2023 Revaluation feel free to contact our office at 860-526-0013 x 512.

Very sincerely,

Emily Eckenroth