Interesting article in yesterday’s Boston Globe, Tax Challenge Rewards Healey — in Vermont; Lieutenant Governor, Spouse Fought Bill on Vacation Home.  The Massachusetts Lieutenant Governor and her husband paid $700,000 for a Vermont vacation home in 1998.  Three years later, the town valued the property at $727,900.  The Lt. Gov. and her husband joined four other homeowners in challenging their assessments.  Despite a booming real estate market, the Vermont Supreme Court upheld the state appraiser’s reduction in the assessed value of the home to $370,444 because the town had not assessed other homes at their fair market value.  Allen v. Town of West Windsor, 2004 VT 51 (May 28, 2004):

Vermont law requires that property appraisals for tax assessment purposes reflect a property’s fair market value. Under § 3481(2), the listed value used for assessing taxes should be equal to the property’s fair market value. We have long acknowledged, however, that listing all property at fair market value is not practically feasible every year, particularly in a rising real estate market. Thus, a difference often exists between listed and fair market values of real property, and that difference is permissible so long as the ratio between listed and fair market values is consistent among properties. The need for uniformity derives from the constitutional command that no taxpayer pays a disproportionate share of the public tax burden. Accordingly, in property tax appeals arising under § 4467 of Title 32, the Legislature has directed the state appraiser to list the property subject to appeal at a value that corresponds to the listed values of comparable properties in the town.

In the five appeals consolidated here, the state appraiser reduced the listed value of each property to ensure tax equity….

The town challenges the state appraiser’s decision to reduce the listed value of taxpayers’ properties to achieve tax uniformity. The town claims that it properly listed taxpayers’ properties at 100% of fair market value just as it did for all other properties in West Windsor….

In each of the five cases on appeal, the state appraiser had ample evidence before him to conclude that the town did not, in fact, list other properties in West Windsor at 100% of their fair market value as the town claims….

The Globe story notes:

The assessors came up with the values based on recent sales, so the homeowners did not challenge the legitimacy of those figures. Instead, the owners asserted that in the townwide revaluation, assessors had raised values for properties that had sold recently but had not adjusted as much for those that hadn’t changed hands. The result of that imbalance, the Healeys and the others asserted, was that the newer homeowners were being ordered to pay disproportionately higher taxes.

”The basis of our appeal was tax equity, not that the value was wrong," said Thomas Hayes, a Woodstock attorney who represented the Healeys and three of the other property owners. ”Most were valued at what they were worth in the market."