Town of Chelsea residents will see property values increased

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An exterior revaluation was completed in order to recalibrate cost models and update property values for 2023, but not all properties will see the same percent increase.

The cost approach to value was used in the town, tested by the sales comparison approach to determine the new assessments. The cost approach simplified is the cost to build something new minus depreciation, plus appreciation due to the real estate market. Properties in the town are now valued at full market value or 100% and should reflect what those properties could sell for if offered for sale. Property owners were wonderful with providing updated information to their homes and outbuildings.

Properties that will see the largest increase are the new homes and homes that have been well cared for which affects the depreciation. This does not seem fair; however, Wisconsin is an “ad valorem” tax state. Ad Valorem means according to value. Good maintenance maintains value.

Rising construction costs, lack of builders and a shortage of existing homes is the underlying increase in property values in this area.

Revaluations are important. Not only are assessors required by law to value properties within 10% of Equalized Value at least once in five years, this process gives the assessor the opportunity to really look over properties, talk with owners and determine if any buildings or remodeling projects were missed during the “maintenance assessment” years. This is a common occurrence due to lack of building permits or owners assuming they do not need one.

Omitted Property – WI Statutes 70.44 requires an assessor, once discovered to add omitted property to the assessment roll and if it was there, go back and collect taxes for up to 2 prior years. Omitted property is anything that should have been assessed but was not. Examples are extensive remodeling, additions, upgrades, new garages, new homes etc. There were 3 properties in the Town of Chelsea that have omitted property – 1 was a garage, 1 was a garage type shed and another was an addition to an existing garage. Total value was $138,000. The resulting taxes paid are distributed to the County, School, Tech College and Municipality once they are collected, providing the tax amount is over $5,000. If under that, the funds are retained by the Municipality. Chelsea will keep the resulting omitted property taxes.

Chasing Sales – It is not legal to set the value of a property to its sale value or the ratio of the sale without revaluing other similar properties. Properties may have changed between the last assessment and the sale, resulting in additional items being added – finished basements are typical, air conditioning etc. During a maintenance year, it is only appropriate to add those items to the assessed value. An example of chasing a sale would be a property is assessed for $100,000. It sells for $200,000. The assessment ratio is estimated to be 85%. The assessor then raises the value of that home to 85% of $200,000 ($170,000) without doing the same to similar properties in a similar market segment. This practice has done nothing but create non-uniform assessments in the state and if known, should be reported to your municipality.

Types of Assessments in Wisconsin

Maintenance assessments are the most common – maintaining the values from the prior year and adding for any new buildings, additions, extensive remodeling, subdivisions etc. and subtracting for property destroyed. No sales chasing.

Interim Market Adjustments are a fast way to update values using trending or percentage increases. This does not require on-site inspections and should only be used it the current assessment records meet all the state requirements and are reliable and uniform. Values are updated based on a thorough sales and valid sales analysis. New construction, destruction is also added.

Exterior Revaluation is appropriate when most information The sTar News

can be verified by an exterior inspection. This requires an onsite view of buildings, sales analysis, updating property information etc.

Full Revaluation is required if property record information is outdated and a full revaluation has not been done in 10 years or uniformity is poor. This requires interior inspection of all buildings, sales analysis and updating property information.

What’s the bottom line? Taxes going up?

The Department of Revenue equalizes the values of municipalities in Wisconsin each year. The purpose of this is to equitably distribute the budgetary requirements of the County, School, Tech College. If one municipality sees a larger increase in equalized value than others, the resulting “bill” will be higher for that municipality. Municipalities are given 5 days to dispute their equalized value, most do not know even what to dispute. The appeal process is even more cumbersome. Chelsea’s equalized value in 2023 was up 23% overall as was the entire county. Adjoining Town of Hammel saw a 32% increase in equalized value. Since taxes are distributed based on the equalized value, the net tax rate will see a decrease. The municipality levies their taxes based on the assessed value; the resulting net tax rate will always decrease with an increase in value.

Property owners should always talk to their assessor if they have questions or concerns. The assessor can answer a multitude of questions except how much your taxes will be. That amount is never known until the taxing bodies develop their budgets in November. A new mailing service is being tried this year, so taxpayers’ notices will come from Lake Geneva. The open book period begins when you get your notice and will end at the conclusion of the in person open book on September 15, 5-7 p.m Board of Review is set for Tuesday September 26 at 6 p.m. This is for formal assessment appeals. Your assessor can also help you with your appeal, as this is a process not a battle.

Property values are online at https://taylorcowi. wgxtreme.com/