Property Tax Post: My House is Worth How Much!? Just How Long is Too Long Between Revaluations?


Rising property values are a double edged sword. Homeowners who need to borrow against home equity or who plan to sell when property values are high, will undoubtedly want the most from their investment and desire high assessments and appraisals. But what about the property owners who are not planning to sell? Those who own in neighborhoods where periodic reassessments are done every quarter century or longer face a very different struggle— longer gaps between revaluations may mean a greater chance for significantly higher reassessments and higher property taxes. How long is too long between revaluations?

Revaluation periodically captures changes in property’s resale and fair market values.  This process is important in eliminating disparities and keeping taxpayers from paying too much or too little property tax.  

Revaluation Cycles

The frequency of revaluations vary greatly among the states. For example, Pennsylvania does not have a mandate for counties to reassess on a periodic basis. The typical period for revaluations has been between 20 to 25 years. In Blair County, Pennsylvania, the last revaluation was done in 1958 (that’s 58 years if you are trying to do the math). Just recently, the county began conducting real estate market studies to develop formulas for estimating the fair market value for each property. The last revaluation in Washington County, Pennsylvania was in 1981. The Washington County Commission Chairman announced in 2013 that the reassessment of 115,000 properties was a process that was expected to result in new property tax bills starting in July 2016.

New Jersey issued a press release on Feb. 5,  stating that the municipal governments of Elizabeth, Jersey City, and Dunellen will be investigated to determine whether the state should order a revaluation of the properties in those municipalities. Elizabeth has not had a property revaluation in 39 years, Jersey City 27 years, and Dunellen 33 years.

John Rappa, Chief Analyst for the Connecticut General Assembly wrote in his 2012 Property Revaluation Research Report, “Arguably, municipalities could minimize the chances of under- or over-taxing property by revaluing it every year. But revaluations are costly, especially those in which tax assessors physically inspect each property.” Yet some states have had success with much shorter revaluation periods like Massachusetts and Alabama that recertify each municipality’s property values once every three years. Alaska, Arizona, and Georgia revalue annually.  

Connecticut sought to alleviate the cost burden of frequent physical revaluations by creating a schedule that filled the gap between physical inspections with statistical valuations. The Connecticut Property Revaluation Research Report explains that municipalities in Connecticut are required to revalue property every five years by inspecting property, analyzing sales statistics, or a combination of the two methods, but an inspection must be done at least every 12 years. This method allows inspection costs to be spread over 12 years and the inspection and statistical data gathered during the five-year period is used to complete the next revaluation.

When deciding what type of revaluation system to use, policymakers must consider the cost to the state and the impact on taxpayers. Properties appreciate and depreciate at different rates in different neighborhoods. Properties valued every 20 or more years face challenges of unexpected, substantial, and highly visible increases. Policymakers should also consider how decreased frequency of property revaluations may result in less equity, unfairness, and less reliable data.

Continue the discussion on LinkedIn:  Are annual revaluation approaches better than cyclical?

For more information about state tax issues, sign up for a  free trial on Bloomberg BNA’s Premier State Tax Library.

By Cynthia N. Wells