TMI finds out about the nuts and bolts of property taxes
With a new year, a new tax season begins. The bills for town, county and local districts have been mailed. Taxpayers have until February 28 to pay those bills. Bill paid after that date are subject to a penalty.
Bookkeeper Laura Hurley, Assessor’s Aide Judy Malstrom, and Town Clerk Mary Alex and Assessor Tyger explained the process and procedures affecting property owners.
The tax bill is determined by two factors: the mill rate and the assessed value of the property. The mill rate is determined by two numbers: the tax levy for the particular tax (county, town, village, and, for the Town and Village of Millbrook, fire and library- that’s five taxes altogether in one bill) and the total assessed valuation for the district. The tax levy is comes from the budget process. It is the amount the municipality needs to raise from property taxes to run the government. The assessed values come from the assessors office and are based on the assessor’s judgment of value using guides established by the State Office of Real Property Tax Services. The assessment may be reduced by exemptions for the elderly, disabled, and elderly on limited incomes. The agricultural assessment is not an exemption, but an alternative method of calculating value based on classes of farmland as determined by the state.
Assessor Tyger gave an example for a person living in the town. If the property was assessed at $300,000, you multiply that number by the mill rate which is 1.40 ($1.40 per thousand) and the tax would be $420. For an owner of a house of the same value in the Village, multiply 300 by the Village tax rate of .47 to get a total of $141.
The difference between the Town and Village relates as to how the two municipalities arrange shared services. The Town pays for nearly $1 million for the Town Highway Department in its town tax and the Fire District levy ($412,664) in a separate tax. The Village pays for its police department through a separate tax and is also responsible for paying the Library District levy ($100,000). A tax bill for a property in the Village includes the county tax at a rate of 3.45, village taxes at a rate of .47 and the library tax at a rate of 0.08. So, using Hurley’s property for instance, her home was assessed at $289,600. So adding the tax rates would give you a rate of 4. Multiply 289.6 by 4 to get total taxes of about $1,158.40. A tax bill for a property in town would include county taxes at a rate of 3.45, town taxes at a rate of 1.40, library taxes at a rate of 0.08 and fire district taxes at a rate of 0.33 for a total rate of 5.26. Multiply that by a property in town worth the same amount at 289.6 and that property owner in town would be paying about $1,523.30 in taxes.
Hurley gave the deadlines for taxes and different phases of the process.
Tyger begins to look over his roll of property assessments on May 1. On July 1, he certifies the tax roll. In that same month, he begins visiting properties, determining what additions have been added onto properties such as swimming pools or a new floor of living space which would increase property value, and determines property values. A property’s assessed value is the assessor’s valuation adjusted by any exemptions. Hurley said 160 parcels in Town qualified for tax exemptions. Last week, tax bills were sent out during the week of Jan. 18. Alex said the collection period began on Jan. 22. Village and town residents have until Feb. 28 to get their tax payments in without penalty. If payment is received in March, the penalty is two percent interest. In April, the penalty increases to three percent. In May, it is four percent plus $2. If taxes are still not paid by June 1, it becomes a county problem. The delinquent tax bills are turned over to the Dutchess County government which pays the town and then institutes collection procedures. After three years, the county holds a tax sale.
Real estate taxes can’t be paid in installments. The full amount is due at one time unless the taxpayer has a mortgage. Most mortgages require the property owner to pay the estimated taxes in installments and the bank pays the tax. Alex said in the economic downturn, some residents have had difficulty with paying their taxes. Alex said about 92 to 95 percent of residents pay their taxes before June. About 70 to 75 percent of people pay their taxes by February and therefore, do not receive a penalty.
Hurley said home values have decreased over the past few years. That $300,000 house would probably have been valued at $425,000 a few years ago. Tyger also looks at building permits and additions such as whether a swimming pool has been added to the property.
If an owner believes their property is assessed too high, they can challenge the assessment. An owner can file a petition of review, including bringing documentation of their appraisal, up until Grievance Day which falls on the fourth Tuesday in May. Following that petition, the grievance goes before the Board of Assessment and Review made up of five members who hear the complaint. If the Board of Assessment agrees that the property value should be reduced, they file with the county. If the complaint is denied, that triggers the person’s ability to go to small claims court with certiorari, or judicial review. No lawyer is needed for small claims court. Small claims are limited to claims under $3,000. For larger properties, the owner would go to certiorari with the New York Supreme Court where an attorney would be necessary. When owners are looking for a reduction in value of 25 percent or more on the case must go before certiorari in the Supreme Court. Certiorari must be filed within 60 days after the complaint was denied by the Board of Assessment.
Application for exemptions are due by March 1. Some people are entitled to at least one STAR (School Tax Relief) exemption. STAR exemptions only apply for school property taxes. Low income Senior Citizens can apply for exemptions on county, town and school taxes. The Town offers exemptions to senior citizens with an income up to $36,000. The less a person makes, the higher their exemption. As exemptions are income based, applicants must provide their tax returns. There is also an exemption for the low income disabled and a veterans’ exemption. However, Hurley pointed out that there is no exemption for those able-bodied citizens who may be unemployed and have fallen on hard times.
School tax bills are mailed in early September and can be paid in two installments. In 2012 the first installment had to be paid by September 15; the second payment is due 180 days later. If the taxpayers does not meet the September 15 deadline, then the full amount was due by October 3, after which date penalties accrue.