After the reported sale of a $147 million three-parcel property on Further Lane in East Hampton, an eye-brow raise or two seems only natural. But arguably more startling than the sale price is its comparison to the home’s most recent assessment and what it means for village property taxes.
The property consists of 60, 62, and 64 Further Lane. According to the East Hampton tax assessor’s office, the last assessment on 62 Further, the 8.3-acre parcel where the home sits, was done in 2003. It was valued then at $9,267,223.
According to East Hampton Village’s website, “the assessed value of a residential property in the village averages approximately 2-percent to 4-percent of the market value of that property.” While it’s conceivable the sale, if legitimate, was wildly over-priced, it’s also conceivable $147 million is the actual market value of the home, thus shedding light on just how out-of-date the last assessment is.
The issue of reassessment directly lends itself to property taxes. Because property taxes are derived from the assessed value of a home multiplied by the tax rate of the municipality, an out-of-date assessment—especially one potentially $138 million off—would result in much lower property taxes for a homeowner.
According to Jeanne Nielsen, chair of assessors in East Hampton, the last tax bill on the property was $44,944.64 in 2013, which was calculated using the 2003 assessment.
While the drastic difference between the sale price and the assessed value would seem to warrant a reassessment of the home, East Hampton Town only reassesses properties when there is a building permit before the town, Ms. Nielsen said. Without the permit, the town, which does the assessing for the village, does not reassess homes.
“As soon as the market here started to boom in the late ‘70s, that’s when there should have been a reassessment and there wasn’t,” Ms. Nielsen said.
If the town were to do a town-wide reassessment, much like what Southampton Town did in the early ‘90s, the tax rate would decrease and some people would see their tax bills decrease, Ms. Nielsen said.
“If someone is over-assessed, the reassessment should correct that,” she said. “And then there would be some people who have been paying taxes on out-of-date assessments that would see their bills increase.”
A town-wide reassessment in East Hampton, like any town, added Ms. Nielsen, would not result in the town collecting more money in taxes, but “equally redistribute the tax base you have.”
“I believe that East Hampton would probably inadvertently pick up some new tax base but I also believe that if a government is running smoothly and everyone keeps their spending down, you’d want to redistribute the tax base and see where it lands. If there’s a tax rate to reduce, you’d want to give that savings back to the tax payers.”
According to Lisa Goree, the sole assessor for Southampton Town, homes within that township are reassessed every year, enabling tax bills to consistently be up-to-date.
“The advantage of the town-wide reassessment is that everyone is paying their fair share,” she said. “They’re all paying at a uniform equal assessed value. When you have a shift when someone is only assessed at 50 percent of the market value, or 20 percent, that’s when you have unbalance.”
Ed Deyermond, a former assessor for East Hampton and Southampton Town, said that when Southampton conducted their town-wide reassessment in 1990, about a third of the homeowners in the area saw their taxes increase; about a third saw them decrease; and about a third remained the same.
“I was surprised the numbers shook out that way, but they did,” Mr. Deyermond said.
Ms. Nielsen said, to her recollection, no one in Southampton was forced to sell their home or leave town—two concerns, according to Mr. Deyermond, that may be the driving force behind why East Hampton does not do reassessments like Southampton.
“We had people…senior citizens for example, living on a fixed income but their homes had significantly increased in value,” he said of the town-wide reassessment. “We looked at what programs we can get to help these people who would be severely impacted. We tried to increase our exemption limits.”
Furthermore, said Mr. Deyermond, the cost of performing a town-wide reassessment would be a multi-million-dollar burden for the town.
Ms. Nielsen said in her 27 years at the tax assessor’s office, although the idea of a town-wide reassessment has rarely been looked upon favorably, it would be in the town’s best interest to go through the data collection process to make sure all the information on file is up-to-date should it decide to do a full reassessment.
“Now your real estate market is flying through the roof and things are selling for 100 times more than they were valued 10 years ago,” said Ms. Nielsen. “That should have given someone a hint that we should have reassessed a long time ago.”