Ho, Ho, Ho – It’s Tax Bill Time

A look at revaluations and the individual property tax impact

December at the Door County Treasurer’s Office is a different kind of seasonal rush, one where employees spend their time folding and stuffing roughly 43,000 property tax bills.

“If everything goes well, everything can get printed in two weeks and we can usually keep up with the stuffing when the stuffing machine is working – and today it’s not,” said Door County Treasurer Ryan Schley earlier this week. 

The County of Door calculates and prints property tax bills for all 19 Door County municipalities, but the local municipal treasurers mail the tax bills out.

“Once they’re ready, we let [the treasurers] know and they come and pick them up,” Schley said. 

Schley’s office started printing the tax bills this week and is finishing them as fast as their machine can stuff them. The first of the tax bills could land in mailboxes as soon as the end of this week. For many across the peninsula, that means a first look at their property’s new assessed value during this post-pandemic, market-value boom. 

A Rise in Property Values

The prices that properties have sold for across Wisconsin have boosted the state’s total market value, also known as equalized value, by 13%  ($842 billion more), according to the Wisconsin Department of Revenue’s (DOR) Equalized Values Report released in August. 

During the same time period, Door County’s real estate values grew by 21% ($2.2 billion more). Growth in individual municipalities in Door County have ranged from a 14% increase (the Town of Brussels), to a 32% increase (the Village of Sister Bay and the Village of Egg Harbor).

“Ever since the pandemic, we’ve seen property values, especially residential property values, rising at unprecedented rates,” said Dean Peters, vice president of operations with Appleton-based Associated Appraisal, which is the appraisal company for about seven Door County municipalities.

The rapid increases have pushed market values out of alignment with assessed values, which is the price a municipality uses to determine real estate taxes. If the divide grows too great between the two  – more than a 10% difference – the state requires municipalities to revalue all properties within a given municipality. 

Holly Hansen, who heads up the Door County Real Property Listing in the county’s Land Use Services department, said the divide is as high as a 50-60% difference in some municipalities. 

“I have not seen this in the 30-some years I’ve been here,” Hansen said. 

Prior to a couple years ago, Hansen said it was highly unusual for a Door County municipality to fall out of compliance with the equalized-to-assessed value ratio that triggers the state to require a full revaluation – which means a municipality must contract to have all properties physically inspected and create a new tax roll.

The City of Sturgeon Bay was the first in the recent wave to complete a revaluation in 2020, its first in more than a decade. 

Yet this year, four municipalities have undergone a revaluation according to data kept by Casey Franda, County of Door chief deputy treasurer: the towns of Baileys Harbor, Gibraltar and Union, and the Village of Sister Bay. Another 10 municipalities, according to Franda’s data, are also out of compliance. Two of those – the towns of Sevastopol and Nasewaupee – will likely commission a  revaluation in 2024. Two others have opted for interim market updates – the Town of Liberty Grove this year, and the Village of Egg Harbor for 2024.

Peters said this kind of interim market update, rather than a full revaluation, is allowed under DOR guidelines and can bring a municipality into compliance if the assessor’s records are accurate. It can be an attractive option financially also: full revaluations cost in excess of $100,000 and despite being required by the state, are paid for in full by the municipality.

“Generally, the market update is less expensive because there’s not as much field work involved,” Peters said. 

Will Your Property Tax Increase if Your Home Value Does?

Revaluations are revenue neutral, meaning municipalities are not collecting more revenue once the new tax roll is completed, Peters said.

“It does not change a cent of how much tax is collected,” he said.

Instead, the total revenue the municipality collects is redistributed across its entire tax base in accordance with the new values. That means the mill rate the municipality uses per $1,000 of equalized property value decreases as overall property values increase.

What a revaluation means for individual property owners is as different as their properties.

“About one-third stay the same [in property taxes], about one-third go up and a third go down,” Peters said.

A good indication of which will be the case for a property owner is how much their individual property value increases after a revaluation in relation to the municipality’s entire property value increase. If municipal values rise 30%, an individual property owner wouldn’t see a tax increase unless their property value increased more than 30%, Peters said.

For property owners to better understand what’s happening with their property values and real estate taxes, Peters recommended the DOR’s 2023 “Guide for Property Owners,” which can be found at revenue.wi.gov.

“I think it’s important that property owners understand this process,” he said. “You pay a lot of money in property taxes. It affects all of us and is an important thing to understand.”