The town-wide revaluation aims to reassess property values to reflect current market conditions, meaning your property value should more closely match today’s selling prices. This process ensures a fair distribution of the tax burden among property owners based on the current value of their properties.

A visual explanation of how property assessment works.

The total value of ALL properties in Cape Elizabeth before the revaluation was $1.8 billion. After the revelation, the total value increased to $3.8 billion, an approximately 111% increase. That means most homeowners can expect their assessed property value to increase by a similar percentage.

It’s important to know that an increase in property value does not always mean an increase in taxes.

This is because your home value in relation to the total value of the town is your slice of the “budget pie” to pay. If every property increases the same amount, then your piece of the “budget pie” should remain relatively similar to today’s, with adjustments up or down for certain hot-selling neighborhoods or features in your individual home.

The municipal budget, on the other hand, does not similarly increase. Last year, the town budget paid by property taxes was $40.5 million. This year, it is $41.6 million. Therefore, the amount of money that needs to be raised to pay for the budget only increases by annual inflation, town projects, etc. In this case, the annual increase is 2.8%. (Numbers taken from Cape Elizabeth’s FY 2025 Budget Pro Forma.)

To account for rising property values but a “static” budget, the mill rate is decreased, meaning you pay less per thousand of value than before the revaluation.

*Example of how the mill rate is impacted by an increase in the town’s valuation.*

When does the new property value take effect?

The revaluation takes effect starting FY2025, meaning your new property value and the new mill rate will be on your October 2024 property tax invoice, typically sent in August/September. You can view your new property value on the Property Assessment Data website, however, please know this number does not include discounts such as the Homestead Exemption which reduces the value of your home (for property tax purposes) by up to $25,000.

How does the “middle ground” project factor into this?

As a municipality, the school construction bond is completely separate and has nothing to do with the revaluation, which occurs every ~10 years, though the Town Assessor has indicated a desire to conduct more regular revaluation updates to keep property values more current in the future.

Individually, you may be wondering so that you can plan ahead for any changes to your property tax bill. Therefore, it’s important to know that the “middle ground” bond would not impact taxes until FY2027, or your October 2026 tax bill, giving you two years to anticipate the increase. Per the town’s bond agent, the increase schedule will be:

*Source:* *Pro-forma and Charts, Column H* *from the Town Council Meeting on July 8, 2024*

This means that the tax increases due to the school bond will be phased in over 3 years, so residents will have time to prepare and plan ahead.

For the average homeowner (median property value of $720,000), the cost of the “middle ground” project will start at ~$10/month in FY2027, increase to ~$35/month in FY2028, and peak in FY2029, for a total of ~$80/month where it will remain level for the life of the bond (or until refinanced to more attractive terms.)

By knowing your share of the “budget pie” and how it relates to the overall town budget, you can better understand how your taxes may be affected by changes in property values.

As a general rule of thumb, 33% of properties see an increase in their slice of the pie (and resulting tax bill), 33% see a decrease, and 33% see a neutral change.
If your taxes increase as a result of a revaluation, it means your home value increased more than others around you, and you were likely underpaying on previous years’ tax bills.
If your taxes have decreased, it usually means properties around you increased more than yours or that new construction has taken some of “your pie” to pay for the budget.

Property value assessments are not permanent and can change over time. Individual homeowners can appeal their assessed value if they feel it is inaccurate or unfair by contacting the Tax Assessor.

You may also wish to look into property tax relief programs, if you qualify.