Property values and tax rates

There seems to be a common misconception that a homeowner's property tax bill increases because their property valuation has increased. Not so!
Property tax bills will generally increase each year, even if the overall value of all property in town were to decrease.
The tax bill is determined largely by the Town budget, appropriated by voters at the Annual Town Meeting. A large portion of this budget is funded by property tax revenues. The total amount of taxes to be collected in a year (the tax "levy") is spread across the property owners in town based on the value of each property. A new "tax rate" is set each year, which determines the tax to be paid for each $1,000 of property value. This rate is calculated by dividing the total tax levy by the total value of property in town (with some adjustment to charge slightly different rates for residential and industrial properties). So if the tax levy goes up, the average tax bill must go up, regardless of how property values have changed year to year.
Historically in Andover the property values have increased faster than the tax levy, so the tax rate has generally gone down each year over the past decade. In FY1995, residential property owners paid $16.06 per thousand dollars of property value, but by FY2007 this rate had reduced to $11.25. The average property valuation more than doubled in that same time period ($227,300 to $591,800) so even though the tax rate decreased, the average tax bill increased 82% in that same period.
So don't get mad at your property assessment each year, thinking that it's the culprit causing your tax bill to rise! Unless your assessment has risen more rapidly than comparable properties in town, you will be paying approximately the same portion of the overall tax bill as you did in previous years. Of course, if you think your assessment is out of line with the valuation standards, your tax bill will be reduced if you sucessfully challenge the valuation get it decreased.