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STAMFORD — The average Stamford homeowner can expect to pay 4.3 percent more in property taxes with the July 1 start of the new fiscal year.
The percentage is an average, but likely not typical.
That’s because the new tax rate includes the effects of a recent state-mandated property revaluation conducted during a COVID-19 pandemic home-buying spree that pushed prices through the roof.
That will create considerable variation, depending on how sales affected the value of individual homes, said members of the Stamford Board of Finance, who set the new mill rate Monday night.
“If your street or neighborhood had a lot of sales and the comparables went up, you might have a larger increase,” said Mary Lou Rinaldi, the finance board vice chair.
Comparables are used to determine the value of a house by comparing it to similar houses sold in the same area.
“If you live on a street or in a neighborhood that had no sales activity, you probably will not see a dramatic change in your tax rate,” Rinaldi said of the revaluation, based on sales transacted between October 2021 and October 2022.
Otherwise, the change could be quite dramatic, said Rinaldi, using her home as an example.
“On my little cul-de-sac with about 10 houses, three sold for more than $900,000 and two sold for more than $1.2 million,” she said. “My house value went up. But that only helps me if I’m selling.”
If not, it hurts.
The 2023-24 tax hike would be just under 1.9 percent without the pandemic-fueled revaluation, finance board members said after Monday’s meeting.
But homeowners won’t know how they fare until they get their tax bills late next month, Rinaldi said.
“There’s no number that will be the same for everybody,” she said.
An average example
For now, the board deals in averages.
Chairman Richard Freedman provided an example using an average homeowner living in tax district C whose assessed value last year was $400,000, roughly the average home assessment before the revaluation.
That homeowner’s taxes last year were $10,532, Freedman said. But, with the revaluation, which increased home values an average of 25 percent, that owner’s home value would rise by $100,000.
The home now would be assessed at $500,000.
Because the new values are so high, elected officials voted to phase in the tax increase over two years.
So, Freedman explained, this year the tax department will consider the assessed value of that home to be $450,000, not the full $500,000 established by the revaluation.
Under the new mill rate for District C set Monday, that owner’s taxes in the coming fiscal year will be $11,007, or $475 more than this year.
The tax department will use the full new assessment of $500,000 next year, Freedman said.
“The reval impacts next year will be slightly less on homeowners,” Freedman said. “It’s how the math works out.”
While the revaluation increased the value of single-family homes about 25 percent, it increased the value of condominiums only 14 percent. Freedman said the average condo owner can expect a tax decrease of 1.2 percent.
“By my calculation, the average condo owner will pay about $70 less in taxes” in the coming year, finance board member J.R. McMullen said after Monday’s meeting.
The revaluation increased the value of commercial property the least – only 7 percent. So commercial property owners will see a significant tax decrease of 8.4 percent on average, Freedman said.
“That’s only office and retail space, not apartments,” Freedman said.
“Office values caused a lot of the shift,” he said – homes increased 25 percent but “office values barely increased or even dropped.”
Those hardest hit by tax increases this year are the owners of two-, three- and four-family homes, McMullen said. The revaluation increased the value of multi-family homes an average of 36 percent, according to information from the administration of Mayor Caroline Simmons.
“Taxes on four-family homes could increase up to 18 percent. That’s the extreme end,” McMullen said. “The only good thing about that is that there are not a ton of them.”
Apartment buildings of five or more units were assessed an average of 26 percent higher, so the tax increases on those properties will be similar, on average, to those for single-family homes.
A school building burden
As property owners await their tax bill, there’s one more factor to consider.
The numbers presented by the Board of Finance include $15 million for a reserve fund established last year to help pay for a 20-year, $1.5 billion plan to repair and reconstruct Stamford’s aging school buildings.
The contribution to the reserve fund, however, must be approved by the Board of Representatives, which will consider it during a special meeting scheduled for 8 p.m. Wednesday.
If city representatives vote to include the $15 million, the average tax increase for a single-family homeowner will be 4.3 percent, as described by finance board members.
If city representatives reject the $15 million reserve for school buildings, taxes will be significantly less.
“It would be a 1.5 percent tax increase for the average single-family homeowner without the $15 million included,” McMullen said.
Consider Freedman’s example of the single-family homeowner whose tax bill will increase from $10,532 to $11,007.
If city representatives vote down the contribution to the school building reserve, that homeowner’s 2023-24 tax bill would be $10,701. That would be $306 less than if the contribution to the school building reserve is approved.
Freedman Tuesday wrote a letter to Board of Representatives President Jeff Curtis recommending approval.
Since both boards approved the original contribution of $20 million to the reserve fund one year ago, they have authorized another $132 million – $86 million for a new K-8 Roxbury School plus $46 million for projects at seven schools in the 2023-24 capital budget, Freedman wrote.
Besides that, the cost of reconstructing Westhill High School has been revised from $257 million to $301 million, and a $160 million capital authorization request for the new South School is expected shortly, Freedman wrote.
“While all of these projects receive reimbursement from the state, the reimbursement percentages vary and our local share is still substantial,” he wrote.
Moreover, he wrote, the interest rate the city pays on its bonds has risen from 2.5 percent last year to an anticipated 4 percent this year, and the need for “float” money has increased. “Float” is the cash required to pay construction bills in full while the city waits for state reimbursements, which lag for several months, Freedman wrote.
As it stands, the new mill rates are:
25.24 for tax district A, down from 27.17
24.76 for tax district B, down from 26.68
24.46 for tax district C, down from 26.33
24.86 for tax district CS, down from 26.74
27.17 unchanged for personal property
27.25 for motor vehicles, also unchanged