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Jan, Home Buyer in Preston, CT

When will the mil rates go down in Ledyard from 25.65 or 25.67?

Asked by Jan, Preston, CT Mon Apr 12, 2010

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The town sets up a budget. (as an example consider the following) They need $1,000,000 to run. They have 1,000 houses in the town all identical and worth the same amount.

If each house would sell for $10,000 they will have to pay $1,000 to fund the town.
If each house was worth $1,000,000 they will each have to pay $1,000 to fund the town.

The mil rate will almost certainly drop only after house prices rise enough to allow the town to take the same amount of money based on a higher house value. It makes no sense to think otherwise.

Even if the mil rate drops expect (in real life) taxes ($$$) paid to go up. There is no way to avoid it unless more expensive property comes into town without adding to town expenses.
0 votes Thank Flag Link Wed Apr 28, 2010
The mill rate would go down if the town generates enough income to cover the town expenses. The assessments on the properties can change every 4 years when they reevaluate and depending upon market conditions, that number can go up or down. The mill rate is multiplied by the assessment to determine the taxes. If the assessment goes down, the mill rate would be adjusted (probably up) to offset any tax loss if needed to cover the town expenses. Being a resident of Ledyard since 1994, my experience has been the taxes have gone up but I would think that is probably true of most towns with the state of the economy.
Flag Thu Mar 13, 2014
I just had a chance to read the question again. The mill rate will go down when the town is generating enough income from property taxes to pay for all the expenses that the town is generating. This is an equilibrium that is always changes as the market changes.

All the best,
Tim Bray
B.S. Real Estate & Urban Economics
0 votes Thank Flag Link Wed Apr 28, 2010
Hi Jan, great question. The issue is the amount of revenue being generated through property taxes. These taxes are the primary source of funds for the town and act as fuel for the towns expenses like plowing, schools, and the road system. Right now there are many foreclosures and short sales all over South Eastern CT. The owners of these properties are not paying taxes and leaving the burden on the rest of us. The town is trying to make due with less income but it is very difficult. Many people are buying homes close to the assessed value and not the appraised value as stated by the town. Some feel that their taxes will decreease because the value of the property has dropped. This is a falacy as the town may decrease the assessed value but the mill rate will have to increase to compensate for the loss. Here is an example.

I hope that this was of help. Feel free to email me and I will be happy to elaborate. I am from Preston as well.
0 votes Thank Flag Link Wed Apr 28, 2010
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