Assessed property values went up - but why by 70% on average?

There's been a steady stream of residents at Thetford Town Hall, either to see the Listers or failing that, the Town Clerk. It's a measure of the consternation over the town-wide reassessment of property values. In fact Thetford values have gone up by an average of around 70%, which seems like a whopping increase.

This reassessment has to do with how Vermont raises money to pay for education. The state education property tax is one of several sources of revenue that pays for schools. Somehow the state has to tax all the municipalities in VT in a manner that seems reasonable and consistent. Thus the state bases its education property tax each year on the fair market value of all properties in each town. In a perfect world this would be reflected in the grand list of each town.

Fair market value is the amount that a property sells for in a transaction between independent, unrelated parties acting in their own best interests. 

However, as we all know, property prices have been changing in the upward direction for years, while the value of the grand list is rarely updated. To do so requires a town-wide reassessment (reappraisal) that is both time-consuming and costly. Thetford's newly-minted reappraisal has taken over two years, consuming the time of three part-time listers with assistance from an outside consulting company. Thetford's last reappraisal was in 2012, so the grand list based on that is sorely out of date.

To apply education property tax fairly across towns the state computes the current value of each town's grand list using data from all fair market property sales over the last three years, in each town. The grand list value of each property sold is then divided by its actual selling price to give the "assessment to sales ratio." All the individual ratios are then used to calculate the town-wide level of assessment - also known as the Common Level of Appraisal or CLA (expressed as grand list price divided by sale price multiplied by 100% of fair market value).

Because Thetford's appraised values were determined back in 2012  the town's CLA has been steadily dropping over the years as sales prices have risen.

Thetford CLA since 2017:

2017: 95.23%
2018: 94.45%
2019: 92.06%
2020: 92.18%
2021: 85.89% |
2022: 81.7% | (COVID pandemic; influx of homebuyers from out of state)
2023: 72.87% |
2024: 63.6%
2025: 60.05%

In a bare-bones explanation of how the education tax is derived, the state calculates a base education tax rate from local school spending compared to the target amount of spending per “equalized pupil”  that is set yearly by the legislature. This base rate is adjusted for each town by dividing it by the town’s CLA to account for any disparity between grand list appraised values and fair market property values. The CLA of 60 for Thetford would be expressed as 0.6 and the base rate for state education tax would be divided by 0.6, which would INCREASE the town education tax rate, thus compensating for Thetford's under-assessment of property values.  

State law historically mandated a town-wide reappraisal if a town's CLA fell below 85% or climbed above 115% of fair market value. However in 2023 the state repealed the CLA threshold as an automatic trigger for mandatory town-wide reappraisals. Instead the law now requires town-wide reappraisals every six years, with the first wave to be completed by April 1st 2027. This is the largest property reappraisal effort in VT history.

So why the increase on average of 70% in assessed value in Thetford? 

The CLA in 2025 was 60.05% of fair market value, which means properties were undervalued by 39.95% on average. So property needs to increase its current assessed value by 39.95% of that 60.05, in other words, by 66.5%.

The average increase across town was about 70%, so why did some properties go up more than 66.5%? 

A home’s value is often increased by structural and functional home upgrades, an example would be adding living space by finishing a basement or an attic. Kitchen improvements like modernizing cabinet doors, changing to granite counter tops and upgrading appliances can boost market value. Increasing a home's bathroom-to-bedroom ratio by converting a half bath to a full bath or adding a new bathroom is another value-boost, as are exterior improvements like new entry or garage doors and replacing siding. Solar panels can increase a home's value by 3-4% on average nationally, as can heat pumps.

The Town describes reappraisal as "revenue-neutral" meaning that the town collects the same amount of taxes whether or not there has been a reappraisal.  BUT, that doesn't mean that individual tax bills will stay the same. It depends on how each property's value changes in relation to others.

To "grieve" (appeal) a property tax assessment  a homeowner must file a formal written appeal with the Listers Office within 14 days of receiving a Change of Appraisal notice. Concrete evidence, such as recent comparable sales, factual data errors, or unequal assessments must be provided to be successful.