Some Property Owners See Hefty Tax Increases from Reappraisal

By Beacon Staff

When Judy Pettinato’s parents bought land on Whitefish Lake in 1957, they paid roughly $6,500 for their waterfront property.

A modest house soon followed – a two-story log home with a bank of windows facing the lake and stonework made with rocks her father hauled from Eureka.

After her mother died in 1995, Pettinato and her husband, Russ, took over ownership. They moved in permanently a year ago after they sold their downtown Whitefish home when Russ retired.

But thoughts of living out their retirement at the home were quickly put on hold when the Pettinatos received their property reappraisal assessment from the state Department of Revenue.

The reappraisal showed the property’s total market value in 2002 at $374,654. Pettinato said they were expecting an increase for the reappraisal, but the July 2008 market value – more than $1.8 million – was shocking.

Even more shocking were the estimated tax payments. The tax calculator from the Department of Revenue showed payments increasing from over $4,000 in 2008 to more than $13,000 in 2014.

“I cried when I looked at that $13,000,” Pettinato said. “We’re on a fixed income. I don’t know what we’re going to do.”

Property reappraisal must happen every six years in Montana, according to the state constitution. The idea behind reappraisal is to re-disperse property tax payments among Montanans, said Scott Williams at the local revenue office.

If reappraisal didn’t occur, someone living in a median value home would end up paying more than their share of the property taxes than a person in a higher value home, Williams said.

Despite the reasoning, some Flathead residents are appealing their assessments because they think the state has assessed their homes too high.

In Lakeside, Ann Koedding thought she knew what to expect in her reappraisal assessment. As a real estate agent for Glacier Sotheby’s, she decided to get her five-acre property and house appraised in June 2008.

The appraisers valued the home and the property at $290,000. Koedding said she anticipated the state to come up with a similar value. The state, however, assessed the July 2008 market value at $399,366.

Koedding said she immediately appealed the assessment and has a good chance of winning because of the June 2008 appraisal.

Landowners have 30 days after receiving their reappraisal assessments to appeal the numbers. The deadline for Flathead County appeals is Oct. 2.

“I’m just really concerned that people won’t appeal,” Koedding said.

Lawrence Heavriland also plans on appealing the reappraisal numbers for his two-acre property near Glacier Park, and has decided to encourage others to do the same. He painted a sign that advocates protesting the reappraisal and will be placing it in various parking lots.

“I’m trying to get people stirred up to file this appeal,” Heavriland said. “They tell us what our property’s worth and then they tax us accordingly. To me, my property’s worth what I put into it.”

To appeal an assessment, Williams advised meeting with the local revenue office to set up an informal review with one of the appraisers to go over the assessment numbers.

If the landowner is still dissatisfied, they can appeal to the Flathead County tax appeal board or directly to the state tax appeal board.

Williams also advised property owners to visit the Department of Revenue Web site (www.mt.gov/revenue) to calculate their estimated property taxes for the next six years.

The Kalispell revenue office has not seen more appeals for this reappraisal cycle than in previous cycles, Williams said. He believes the 2009 Legislature did a good job mitigating most of the reappraisal’s effects and that most people will only see a $100 to $200 tax increase.

Residential property in Flathead County has increased in value by 73 percent in the last six years. The average across Montana is 55 percent.

“We knew the properties that appreciated greater than the state average would see a tax increase,” Williams said.

He also said property taxes are not based solely on the property value, but that they also take local mill levies into account. Levies differ from town to town and some may change as a result of the reappraisal.

There are also property tax assistance programs already in place, including the elderly homeowner/renter income tax credit or extended property tax assistance for those whose property value increased more than 24 percent after the reappraisal. Information on these programs is attached to the reappraisal assessments.

Pettinato said she is unsure if she qualifies for the assistance programs. If their appeal does not reduce future property taxes, she said they are looking into renting the home to vacationers.

“That might be the only way we can keep it,” Pettinato said.