Property taxes less fair without revaluations

In Kennebunkport, those living on or near the water aren’t paying what they should.

— The inability of state and local leaders to address Maine’s high tax burden has far-reaching consequences, and in Kennebunkport, fairness is what is being lost to inaction.

Voters in the town have repeatedly put off setting new property values for the purpose of determining local tax bills. No doubt, the state’s high overall tax burden and its heavy dependence on property taxes generally have fueled dissatisfaction in Kennebunkport.

The result, however, is that some people in Kennebunkport are not paying their fair share of taxes. Assigning current values to homes is fundamental to keeping the property tax equitable. Kennebunkport residents would be wise to set aside their frustrations with taxes overall and make their local system as fair as it can be.

When a town or city does a revaluation, it is not raising taxes. Rather, it is redistributing the tax burden according to the relative values of the homes and businesses.

Usually, all properties see their official values increase in a revaluation, but some go up more than others. It is the homes that rise the most in value that will see taxes go up. Other property owners will see their taxes stay the same, and still others will see a reduction.

In Kennebunkport, the state estimates that homes on the water carry official values equal to about 28 percent of their true market value. Other homes are valued at about 40 percent of the market. That means that, as a general rule, people who have homes on or near the water in Kennebunkport would see their taxes rise with a revaluation, while everyone else is likely to see their taxes stay the same or fall.

This is fair because those waterfront property owners are now sitting on much more valuable pieces of real estate. Someday, when they sell, they’ll see a much bigger gain than inland residents. In simple terms, their property is worth more, so they should pay more.

Some argue that because property taxes don’t take current ability to pay into account, that they cause hardship. And it’s true that just because some people have more equity on paper doesn’t mean they can afford to pay more in taxes.

But the way to deal with that concern is through reverse mortgages and other programs that keep people from being taxed out of their homes while still paying their fair share.

When it comes to property taxes, the definition of fairness is for those whose property is worth more to pay more.

Editorials, MaineToday.com

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