First, what is the point of revaluation?

A general valuation starts with physical home inspections to make the Town’s database of properties as accurate as possible. Data collectors will visit every home in Camden to make sure our information is correct. These data collectors are thoroughly vetted and approved.

Next, recent sales are studied to measure current assessed values against sale prices. The studies are used to adjust cost tables to the current market, which results in everyone’s new assessment.

The sum of the everyone’s assessment is the town’s total taxable value. The municipal, county and school appropriations are added together and divided by the town’s taxable value. The result is the mil rate. The mil rate is then applied to each property’s value to determine the tax.

In the end, some property taxes will go up, and others will go down. Because of accurate assessment, taxes will be fair for everyone in town.

Article 9, Section 7 of Maine’s Constitution states, “Valuation: While the public expenses shall be assessed on estates, a general valuation shall be taken at least once in 10 years.” We last did a Camden reval in 2004.

What we did in 2022, 2019, and 2017 were not revals but statistical updates. A statistical update is like a reval without the field work. We did these updates because the townwide assessed value to sale price ratio had fallen below 91%. We’ll get to more about ratios later but for now understand that there is a level of assessment we need to maintain.

In a full revaluation, often called a measure and list, we visit every property in town, measure each building on the parcel, inspect the interior of the dwelling and take a picture. While a property owner does not have to allow us into the building, without that access we cannot ensure an assessment’s accuracy.

We’ll divide this question into bite-sized chunks: The Legal definition, Qualifying Sales, Mass Appraisal

a) The Legal Definition

From Article 9 Section 8 of the Constitution, “Taxation. All taxes upon real and personal estate, assessed by authority of this State, shall be apportioned and assessed equally according to the just value thereof.” (Emphasis added.)

Maine’s Supreme Court has established in many rulings that just value is synonymous with market value. Here’s one of them:

“In our State the tax assessors are under both a constitutional and statutory obligation to determine the ‘just value’ of taxable property. ‘Just value’ is the equivalent of ‘market value.’” Shawmut Inn v Town of Kennebunkport, 8/14/1981

Taking that further, “ [Market] value is measured by the highest price that a normal purchaser, not under peculiar compulsion, would pay for it.” Sweet v Auburn 8/29/1935

And further still, “To assess property at its just value is only one of the fundamental requirements of law. The assessment must further represent the owner's equal portion of the burden of taxation…” Kittery Electric Light Company verses Assessors of the Town of Kittery May 16, 1966

There is much to unpack in these statements. Assessors must assess at, or in accordance with, market value and that assessment must reflect a property owner’s fair share of the tax burden. The only way a property’s assessment can represent an owner’s fair share of the tax burden is by accurately assessing that property’s value as well as the value of every other property in town.

b) Qualifying Sales

In order to determine a property’s value, assessors go to great lengths to discover and use true market sales. Market value is measured by the price paid by a normal purchaser not under peculiar compulsion to buy and a seller not under a peculiar compulsion to sell. Such sales are known as Qualified Sales.

Qualified sales are gathered into like groups and their central tendencies measured. Central tendencies are the median, mean and weighted mean averages of a group of sales. Only qualified sales are used to determine market value. Typically, fifty percent of all sales are qualified sales.

c) Mass Appraisal

Individually assessing, or appraising, every property in town is a huge task; one that would require a very large staff. Rather than individually appraise each property, Maine assessors use a valuation methodology called mass appraisal.

In mass appraisal many properties are valued at once using standardized methods. Properties are grouped by common factors, such as location, size, condition and style. By employing standardized techniques and consistent data analysis, assessors can determine property values in a consistent and objective manner.

Adjustments are made to bring property values in line with the current real estate market.

We do this because Article IX, Section 8 of the Maine Constitution requires that, “All taxes upon real and personal estate, assessed by authority of this State, shall be apportioned and assessed equally according to the just value thereof.” The Maine Supreme Court has written in multiple rulings that just value is synonymous with market value.

This does not mean that properties are assessed according to the price paid. Market price and market value are not synonymous. Market price is a factor in determining market value, but it is not the sole factor used.

When adjusting values, we study recent sales, average the results, and extrapolate those results to all similar properties, sold and unsold.

In mass appraisal we build a database of sales by collecting recently sold properties into like groupings called strata. The largest strata is the entire town. Then we divide the town into three sub-strata: residential properties, commercial properties and land.

We continue drilling down into more and more finely detailed groupings until we no longer have enough sales with which we can make useful conclusions. For example, we further divide residential properties into single-family, multi-unit, mobile homes, condos and timeshares. We break each of these strata into waterfront and non-waterfront. We break down waterfront into salt and freshwater. And so on.

We come to valuation conclusions by applying basic statistical analysis techniques to discover the central tendencies within each stratum. Central tendencies are the median average, the mean average and weighted mean average. In assessing, we lean most heavily on the median average because it is less affected by outliers.