Improve Property Tax Equity

by Peter Strauss

In writing for your last edition about Stockbridge land assessments, I was not complaining about the particular assessment of our small Stockbridge plot's value (as the editor's note may have led people to think) but about the overall fairness of the system Stockbridge uses to assess land values. It disproportionally taxes owners of small lots relative to owners of large lots, unfairly burdening them. Correcting this injustice, more than the proposed residential tax exemption, would improve the equity of Stockbridge taxation, and filing a challenge to my particular assessment won't raise that issue.

Stockbridge uses formulas in calculating land value (as distinct from residence value). While I accept that these formulas have been correctly applied, their use results in undertaxing wealthy landowners relative to middle-class landowners — and this may be true all over Stockbridge. Here are two illustrative examples, using the State's Interactive Property Map tool to find the assessed land value for each of two sets of five contiguous properties enjoying frontage on Stockbridge Bowl.

There's straight-line consistency in valuing five contiguous northern lots, each smaller than an acre, in relation to their size. Extended to zero, that straight line suggests a uniform lake frontage value of $580,000 for each. Continuing that line to 2 acres produces a land valuation of about $1.8 million. Two acres is the size at which Mike Blay once told me "real" valuation stops and an artificial value per acre was added for each additional acre.

Five contiguous large lots on the west side of Stockbridge Bowl vary in size from 3.4 to 11 acres. Here, too, a straight line connects their assessed land values in relation to their acreage. But now, extending this line to zero shows $1.435 million as the uniformly shared frontage value. (Using the $580,000 frontage line, $1.435 million would be the total value for a plot of about 1.4 acres.) The total land valuations of these five larger lots land range from $1.449 million to $1.483 million, a difference of only $34,200; thus, the effect of the formula applied here is to value each additional acre at $4,500. Markets do not work this way.

The use of formulas that disproportionally tax often middle-class owners of small lots relative to the often wealthier owners of large lots unfairly burdens small lot owners. Ending this regressive taxation would do much to improve the equity of Stockbridge real estate taxation.

Gould Meadows. Photo: Patrick White