Council unanimously approved the increase to 20% of a property’s appraised value, which was initially proposed to be 17.5%, at its June 16 meeting. Within the ordinance, homesteaded properties are eligible for the greater between $5,000 or 20%.
“I’m hearing from my neighbors that they are going to fight their taxes for the first time in a few years,” council member Adam Schiestel said. “I’m having a hard time finding a rationale to go to 17.5% if we can go to 20%.”
The details
Town officials had until June 30 to increase the exemption for fiscal year 2025-26, according to town documents. Chief Financial John Zagurski said the owner of a homestead with the town’s average value of $465,000 would save around $352 on a tax bill based on the town’s current tax rate of $0.387278 per $100 of assessed value.
With the increased homestead exemption, it shifts the tax base burden to commercial and non-homestead exemption properties.
“If we go to 20%, it will keep the rate slightly higher, even though homeowners will get more benefit,” Schiestel said. “If there was a bit of deflation, it keeps the rate a bit higher and will make sure that some of those commercial properties continue to pay that higher rate, which is better in subsequent years.
Zagurski said the town plans to be able to maintain its current tax rate of $0.387278 per $100 of assessed value despite the higher homestead exemption.
“Our main thing that we can control is the rate,” Zagurski said. “Our homestead exemption is one of the few ways that we can contribute to shrinking the base.”
Some context
Businesses can use different tools to fight assessed base values, Zagurski added, by comparing themselves to similar ones in different areas. Business property taxes are still capped at a 20% increase over three years, he said.
Before 2021, the town’s homestead exemption was the greater of 2.5% or $5,000, according to town documents. Since 2021, when town officials increased the exemption to 5%, there has been a further increase, per the town documents.
One more thing
Zagurski said town officials could potentially discuss lobbying the state legislature to increase the homestead exemption cap for municipalities above the 20% limit.
