Believe it or not, the town’s property tax rate has dropped over the past two years, from a high of $18.75 to $16.61 per thousand of assessed value. So why have tax bills gone way up for many property owners? The answer lies in something residents have little control over—the value of their properties.
Each year assessors add up the value of all the properties in town, and the result becomes the town’s total assessed value. That number is used to compute the tax rate, which represents how much tax must be paid on each $1,000 of property value. In essence, every property owner is taxed on how big a slice of the town assessed-value pie they own.
And each year, the size of most slices gets a little smaller or a little larger as property values go up and down. But in fiscal 2023, the town went through a townwide revaluation, and that caused some big jumps in some residents’ tax bills, while others saw decreases.
Revaluations happen every five years by state law. Town Assessor Michael Saltsman of Regional Resource Group told the Press that values are adjusted townwide at the end of every year, but in revaluation years, the assessors do a more in-depth data analysis of land and building market values, and the Department of Revenue is more involved in the process. That results in more specific changes to assessments that affect some taxpayers more than others.
Property values consist of separate numbers for land and buildings. Following this years’ revaluation, the Press analyzed both land and building value changes for about 20% of the town’s single-family houses. The sample data included 344 single-family houses on 14 roads. The houses represented a variety of styles and conditions and were situated on lots sized from .15 acres to 31 acres.
And the building style winner is … modern contemporary
Five house styles account for 90% of single-family homes in Harvard. Colonials represent about 40% of all homes, modern contemporaries make up about 18%, and Cape Cod style houses account for about 14%. Ranches and antiques each make up 9% of homes. About half of the remaining 10% are raised ranches, and the rest are conventional houses (traditional houses that do not fit the other styles), camps, and bungalows, with just a handful of Tudors.
In the fiscal 2023 revaluation, modern contemporary building values increased more than houses of any other style, nearly 30% on average in our sampling (see graph at right). Raised ranches were on the lower end of the increase at just 9%. Saltsman said that fiscal 2023 values are based on 2022 sales, and both 2021 and 2022 saw “some pretty significant increases in values.” He added that prices of ranch and raised ranch houses had reached higher levels in previous years, so they needed less correction than other house styles. Antiques, he said, don’t sell at the same rate as other types of houses. Market value data is harder to come by for these houses, so antique values didn’t increase as much as those of the more popular styles.
In the land category, the winners are … small lots
Every property in town has a separate value for land. Those values don’t typically change year to year, but they frequently change during revaluation years, and this year was no exception. The value of a 1½-acre lot, considered the prime size for a building lot, jumped by 6%. The value of lots larger than 1½ acres increased less than that because the value of what the assessors consider “residual acreage,” acreage above 1½ acres, came down. Residual acreage dropped from $20,000 per acre to $15,000 per acre. Wetlands and inaccessible acreage are valued separately, and those values also fell, from $2,000 per acre to $1,500 per acre.
The effect of lowering the price of residual acreage caused land on large parcels to decrease in value. For example, the land value of a house on Blanchard Road with 11 acres fell from $384,000 to $361,000. On the opposite end, properties with small lots saw larger increases than prime 1½-acre lots. Saltsman said if the lots are still buildable, their value was raised to be more in line with prime lots. For example, a house on Finn Road with 1½ acres saw a land value increase of $14,100, while the land value of another house on that same road with only three-quarters of an acre went up $15,000, an increase of more than 7%.
Moving to a new neighborhood
Changes in what assessors call “economic neighborhoods” also caused some land values to go up and others to go down (see table at right). The town has six economic neighborhood designations: 20, 30, 40, 50, 60, and waterfront. The neighborhood designation is used to increase or decrease land values based on location. Land values in a 30 neighborhood are considered the norm, while land values in neighborhood 20 are lower, and values in neighborhoods 40 and up are higher. All properties on a street are typically assigned to the same economic neighborhood. Some roads have waterfront or view properties, so those individual properties are considered in a higher neighborhood than the others on the street. Prospect Hill Road, for example, has neighborhoods ranging from 20 to 60, based on each property’s proximity to the road’s expansive views and how much of a view the property has.
During the fiscal 2023 revaluation, several streets in town were assigned to new neighborhoods. Glenview Drive was raised from neighborhood 30 to neighborhood 40, increasing the value of a 1½-acre lot by $39,000. On Old Mill Road, houses were a mix of neighborhood 20 and neighborhood 40; all were reassigned to neighborhood 30. Land values for properties that moved up a neighborhood on Old Mill Road went up by $37,600 for a 1½-acre lot. Conversely, those that moved down saw a decrease in land value of $9,400 for that same size lot.
Other roads that moved down by one economic neighborhood include East Bare Hill and Old Littleton (from 40 to 30), and Stow Road, which moved from 30 to 20. Some houses on Stow Road were already 20; now all are.
All the adjustments to what the assessors call the “land curve” are based on land sales. Saltsman said fiscal 2022’s assessed values of large parcels of land didn’t match up with land sales in fiscal 2023, and that’s why residual acreage values were lowered. Likewise, sales of properties on the roads that were reassigned to different economic neighborhoods dictated that change.
Winners and losers
When properties are revalued in an uneven way, the percentage of town real estate each resident owns changes, and that affects their property taxes independently of the tax rate and any other factors under the town’s control. If someone lived in a modern contemporary house on a small lot on Glenview Drive, for example, they would have received a triple-whammy this year of the highest building value increase, the highest land value increase, and an increase for the higher economic neighborhood they now live in. On the other end of the spectrum, someone living in a raised ranch house on a large lot on East Bare Hill Road would have seen a much smaller property value increase in fiscal 2023. The Glenview Drive resident now owns a much bigger slice of the pie, while the East Bare Hill Road resident’s slice shrank (see sidebar, at left).
In the sample data, many properties with modern contemporary homes on small lots or those on Old Mill Road that moved up a neighborhood increased in value by as much as 30%. Those homeowners received property tax increases of between 12% and 20%, while some raised ranch and antique homeowners with large parcels of land saw their property taxes decrease in fiscal 2023.
Saltsman said fiscal 2024 values were submitted to the Department of Revenue a week ago and have already been approved. He said the process during a non-revaluation year is much simpler, involving just a statistical analysis “to ensure that our values meet DOR standards for full and fair cash value.” Fiscal 2024 data will be based on sales from calendar year 2023.
He said while single-family homes increased in value by about 12% overall during the last year, assessments will not likely experience the sort of uneven shake-up that a revaluation year can bring. The new values will be assimilated into the tax bills that go out at the end of the year after the new tax rate is calculated. Saltsman said tax rates will probably fall again because the town’s total real estate value has experienced another large increase.
Assessment records are public and available on the town website from the assessor’s page via the GIS, or geographic information system. Data for fiscal 2024 will be updated in early January.
A fable: Housing values send tremors through Anytown
Once upon a time, Anytown had only 10 houses, each valued at $100,000. Half of the houses were modern contemporary style, and the other half were colonials. The town’s total assessed value was $1 million. Anytown residents required little in the way of services, and the annual budget remained at $10,000, mainly to pay the salary of the part-time dog officer, who lived modestly. For years, the tax rate remained at 1%, or $1,000 per homeowner.
But one year, modern contemporary houses began selling like hotcakes. Prices skyrocketed, and the town increased its assessment of its modern contemporary houses to $300,000 each. Sales of colonial houses remained slow but steady, so those assessments remained at $100,000 each.
The town now had an assessed value of $2 million. The budget was still only $10,000 annually though, as the dog officer grew most of his own food and shunned modern technology. As a result, Anytown only needed 0.5% of the town’s assessed value to cover its budget, so the tax rate fell to 0.5%.
Owners of colonials were thrilled. Their annual tax bill decreased from $1,000 to $500. But owners of modern contemporaries were shocked to see their tax bills jump from $1,000 to $1,500 in one year.
Neighbor turned against neighbor, as half the town realized it was now responsible for three-quarters of the town budget, even though it owned no dogs. Modern contemporary homeowners lobbied for a leash law in an effort to lower the dog officer’s salary but failed to achieve a majority at Anytown Town Meeting.
—JE
