Property owners in New York’s littlest city could soon be in for a big headache.
Officials in Mechanicville are preparing to reassess all properties in the Saratoga County city for the first time since 2015, alarming homeowners who say the hot housing market has inflated their property values.
The City Council voted 4-1 last week in favor of granting a $48,000 contract to appraisal firm GAR Associates for the gig, the Times Union reported.
Frustrated residents in the state’s smallest city by land area voiced their concerns in a City Council meeting last week, claiming the timing of the reassessment would lead to skyrocketing taxes and hurt homeowners.
“The sales, they’re not very accurate,” said council member Anthony Gotti, according to the publication “Since everyone’s fleeing the cities, the values are inflated.” Still, Gotti ultimately voted in favor of the reassessment.
The equalization rate in the city is 93 percent, meaning houses are, on average, assessed at 93 percent of their actual value. David Barnett of GAR, hardly a neutral observer in the debate, warned officials that the equalization rate could drop to 75 percent next year if a reassessment was not done.
He told the Times Union that there’s typically a three-way split during reassessments: a third of the values go up, a third go down and a third remain the same.
But Barbara McGuire, the lone council member who voted against the contract, said a lower actualization rate would likely be a temporary issue and predicted a flood of assessment grievances once home prices return to normal.
“In two years when everything levels off and that $400,000 house you bought that should be $300,000, you have to go to City Hall and fight like hell to get it where it should be,” she said.
Barnett told the publication that there’s a process to readjust the assessments if the housing market proves to be inflated, though he didn’t divulge how much his firm would charge Mechanicville to do so.
Residents’ fears of higher tax bills aren’t unwarranted. Some owners of new homes or homes undergoing extensive renovations saw their property tax bills nearly double in Nassau County after a countywide reassessment last year, though some will have the tax hikes phased in.
The reassessments prompted about 80,000 property owners to challenge their tax bills, eight times the usual number.
Published by The Real Deal