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How is Berlin's tax rate affecting the housing market?

March 21, 2019
BERLIN — As the city of Berlin works its way through the difficult process of regrowth, property values have suffered, resulting in a tax rate that is much higher than most other municipalities in the state. City leaders work diligently to match residents' needs against the ongoing quest for austerity, but there's never enough money to match demand.

Our correspondent sought to examine the tax rate issue from a different perspective: how much house can you get in different towns for the same amount of property taxes? For this report, market value (based on current real estate listings) was used. Bear in mind that this quick survey does not factor in things like neighborhood and overall condition, and your tax bill is based on assessed value – which tends to be lower than the listing prices of the properties compared.

Using readily available 2018 information, this reporter determined that Berlin's tax rate that year was $39.27 per thousand dollars of valuation, Littleton's was $23.10. Therefore, if you owned a property valued at $100,000 in Littleton you'd pay $2,310 in taxes – a similarly valued property in Berlin would come with a $3,927 tax bill. But what do you get for $100,000?

In an effort to be consistent, the Berlin Reporter went to Zillow and entered search parameters for properties priced no less than $75,000 – and no more than $125,000. First up was Littleton where a two unit home on 1.8 acres is listed at $117,500. This property is 1,932 square feet in size, and had a tax bill of $2,659 for 2018.

Switching the search to Berlin, the first thing one notices is the sheer number of homes available. While the Littleton search yielded three homes, one condo, and six parcels of land - this reporter found 32 homes in Berlin available within the specified price range.

In Berlin, a 2,300 square foot home located on an in town lot had an asking price of $105,500. The 2018 tax bill for this property was $2,356. A three unit property on an in town lot had an asking price of $76,000 and came with a tax bill estimated to be $1,548. A beautiful five bedroom home with over 3,200 square feet for an asking price of $85,000 and a tax bill of $1,763 - while a two family home listed at $89,900 had a tax bill of $2,415.

Generally speaking, it appears that buyers in the Berlin market have more choices in the $75,000-$125,000 price range. Are they better choices? That depends on how much work you want to do, and what type of home you're looking for. In an attempt to reach a clearer conclusion, a search in Littleton for homes between 2,000 and 2,300 square feet was done. A three bedroom two bath home with 2,295 square feet of living space had an asking price of $239,000 and a tax bill of $4,622. The final Littleton property considered has more than 2,100 square feet of living space, 3.9 acres of land, an asking price of $225,000, and a tax bill of $3,437.

A final observation to be made is Zillow's estimate of market trends. For Berlin, the site indicates an 8.3 percent increase in property values over the past 12 months, vs. 6.2 percent for Littleton. Similarly, Zillow predicts that Berlin's values will increase 8.5% over the next 12 months, compared to 6.7 percent for Littleton.

While it appears that Berlin buyers get more house for their tax dollars, there are far too many variables at play to say much more than that. The differences between Littleton and Berlin are many. One thing they both share is a positive outlook for the future. Berlin starts the journey from a different place. The city has seen the enthusiasm and dedication of its residents, and believes this story will be different in ten years.

Martin Lord & Osman
Varney Smith
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