Fix inequality in Cape property taxes

One of my pet peeves is the inequality of property taxes. How much you pay in taxes depends on the assessed value of your home, and state law mandates that every property should be assessed at 100 percent of its current fair market value. Unfortunately, calculating fair market value is not easy, and I have found that well over half of the valuations appear to be either too high or too low.

I checked recent sales of 100 homes in eight Cape towns (Barnstable, Bourne, Dennis, Falmouth, Harwich, Mashpee, Sandwich and Yarmouth) and found only five houses that were right on target (around 100 percent) while almost 60 percent of the houses were so far off as to create a large gap in taxes paid by houses of equal value.

For example, one house in Mashpee sold for $250,000 and was assessed for $355,000; while another sold for $255,000 and was assessed at $230,000. These houses have roughly the same market value, but taxes on one are about $1,200 more per year than taxes on the other.

A house in Sandwich that was sold for about $340,000 was paying about $800 more in annual taxes than a house that sold for a little more — $373,000. There are many more such examples in the sales I checked.

I counted assessments as "accurate" if they were between 85 percent and 105 percent of the sales price. Unfortunately, even this spread includes only about 40 percent of the homes whose sales I checked. About 30 percent of the houses were assessed at more than 105 percent of their sales price; and 29 percent were assessed at less than 85 percent of their sales price.

There was one house that was assessed at more than double its sales price, and five houses whose assessment was above 140 percent of selling price. Those owners appear to have been paying a lot more in taxes than they should.

Eight houses out of the 100 were assessed at 75 percent of market value or less. One was assessed at roughly a third of its recorded sales price. Those homeowners appear to have been paying a lot less in taxes than they should.

Why are these assessments so far off the mark? I don't think it has anything to do with the competence of the assessors. Calculating market value is a hard job, and the computer programs that town assessors use to do it are apparently not up to the task. I do think they could do more to check the output of these programs, but they do not have the resources to do much more than that.

So, what should we do to fix this? I have a simple answer. Whenever a house is sold, the assessment should be set at the sales price unless the assessor has some reason to believe that it was not an "arm's-length" sale.

Then, every year, the assessment on all homes not significantly remodeled should be raised (or lowered) by the same percentage as the annual increase (or decrease) in the median price of all homes sold in Barnstable County.

This system would be simple, transparent, and easy to understand. In addition, I am willing to bet it would be more accurate (and more fair) than our current system.

Jack Edmonston, a community activist, lives in East Sandwich.

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