There have been rumblings around the West Hartford community recently that the 5-year phase-in for property taxes may be phased-out for the 2008-2009 budget year. Two weeks ago I called the town’s Assessor’s office about this, but they claimed they had no indication that the 5 year phase-in would end.
Well, today the Hartford Courant published an article about the possibility that West Hartford would end the phase-in, accelerating the tax increase, which would presumably shift more of the tax burden from residential property owners to commercial property owners. But will this shift really happen? Much of it will depend on the town’s budget and how much, if any, increase occurs for the 2008-2009 budget year.
The article mentions that the town still needs to crunch the numbers to determine if the phase-in will stay or go. This uncertainty raises some significant questions for the local real estate market, as buyers and sellers are kept in the dark on the tax situation for the next month or so. My major questions/concerns are…
1. What do I tell buyers thinking about the West Hartford market when they ask me about taxes on a specific house? Will they go up? Will they go down? By how much? Are we talking another 4% increase that we saw last year? Or more? Or less? This is important information when considering a person’s monthly housing allowance. Believe it or not, this uncertainty will stall buyers from making a decision and may actually cause them to start looking at other towns.
2. For investment property owners, will their taxes increase? Will they be able to pass the increase on to the renter? If not, will the owner be able to afford this increase? Will maintenance be deferred because there is an unexpected tax burden? Is this going to make the rental market in West Hartford even less affordable?
3. What happens to the commercial property owners that forecasted leases based on the 5-year tax phase-in? If the leases are net leases (where the tenant pays expenses), will the tenant be able to handle a significant increase if the phase-in is abandoned? If the lease is a gross lease (the commercial property owner pays the expenses), have the property owners rented the space at high enough rates to cover unexpected increases in the tax burden?
Uncertainty regarding expenses is frustrating for just about everyone. The proposed town budget will be presented to the West Hartford Town Council on Tuesday, March 11. The Town Council must adopt the budget at their meeting on Tuesday, April 22.
Interested in learning more about West Hartford taxes and the budget? You might want to go to the next West Hartford Taxpayers Association meeting on February 27, which will be held at 7:00PM in Room 400 at the West Hartford Town Hall.