Some Danbury homeowners could see tax increase, despite proposed rate cut

DANBURY — Hundreds or even thousands of Danbury homeowners could see their tax bills increase this summer, despite the mayor’s plan to decrease the city’s property tax rate.

The unusual effect follows major fluctuations in the local housing market over the past five years that were captured in the revaluation completed in late 2017.

Those fluctuations did not spread evenly across different types of properties, so the value of some types of homes, apartments and commercial buildings have increased dramatically while others did not.

Because of those unequal changes, Mayor Mark Boughton’s proposed 4.7 percent cut to the city’s property tax rate in the 2018-19 budget will not necessarily mean a lower bill for every property.

Instead, some neighbors on the same street — even next-door neighbors — could find widely different changes to their bills simply because their houses are of different architectural styles.

“A third of the people saw a tax increase — probably even less than that — because there’s such a high increase in their assessment that there’s really not anything we can do about that,” Boughton said this week. “Their home is simply worth a lot more now. But another third will see no increase at all and a third will see a significant tax decrease. So that’s two-thirds of the residents out there that we’re able to help.”

Revaluation

Last year’s revaluation found an 8.5 percent increase to the city’s entire property tax base, but values jumped much more than 8.5 percent among certain types of homes, apartments and commercial buildings, according to city data.

Apartment values, in particular, skyrocketed an average of 28 percent and will raise an additional $2 million in tax revenue next year, the data show. Commercial properties rose an average of 10.2 percent and will raise another $2.1 million.

Even within the local home market, different types of houses increased by varying amounts.

The value of the average ranch home, the largest category of house type in the city, rose by 10.7 percent, according to the data.

In contrast, the value of the average colonial home, the second-largest category, rose by only 6 percent.

The large spread follows the local real estate market demand, which is red-hot as the city continues to grow and attract new residents, Tax Assessor Brian Lastra said.

But it also means that the city’s proposed 4.7 percent tax rate decrease will not apply evenly to those two styles of homes, even if they’re on lots right next to one another, said Finance Director David St. Hilaire.

The lower tax rate also applies to vehicles, which could save car owners another about 2 percent on their overall tax bills, he added.

The owner of that average colonial house who also owns two cars, for example, would see their increased value offset by the tax cut and their total bill will stay about the same, St. Hilaire said.

The owners of that average ranch house would still see an increase in their bill, however, because the value of their home increased more than the offset from the rate decrease, he said.

The same applies to the owners of the more than 1,000 conventional homes in Danbury and the more than 400 split-level homes, each of which increased more than 10 percent, on average, according to the city data.

That puts up to 40 percent of homeowners in the range where they could see some increase in their next tax bills, St. Hilaire said.

Rate setting

Based on St. Hilaire and Boughton’s calculations, at least 60 percent of homeowners should either pay the same or less on their next tax bill.

Although actual value increases vary much higher and much lower than those averages, the city must rely on the average when calculating its new tax rate, St. Hilaire said.

“For 60 percent of people, they’ll say, ‘Oh, okay, I’m fine,’ ” St. Hilaire said. “Then a few percent will come in and say, ‘That’s nuts.’ So they’ll come in and check it out and do their homework.”

There will always be some stuck with higher bills, so the city tried to hit a “delicate balance” that helps the most homeowners possible, Boughton said. But he also argued that those who do see an increase also now have a much more lucrative investment.

“If your home is going up $40,000, $50,000, $60,000 — that’s the best investment you could ever make,” Boughton said. “The reason for that valuation is the quality of life here in Danbury and that people want to buy your home. The market right now is heated. That’s actually a positive sign for people.”

The City Council will take its final vote on the mayor’s proposed tax rate and $257 million city budget at its next meeting on May 1.

zach.murdock@hearstmediact.com