Southampton Town Board Hears Report on Tax Assessment Status

Though no action is imminent, the Southampton Town Board heard an update on a potential full-value reassessment of properties at its April 11 work session.

During a presentation with Robert Wolham, the regional manager of New York State’s Office of Real Property Tax Services, Lisa Goree, the town’s sole assessor, told the board that “our assessments are currently at 69.5 percent of market value,” meaning the town is assessing at just over two-thirds of market value.

New York municipalities are authorized to assess at market value or a fraction of it, according to the Office of Real Property Services.

Sometimes called a “third rail” of politics, the conventional wisdom is that a reassessment will result in around one-third of property owners seeing a property tax increase, another third seeing a decrease, and the rest unaffected.

But “taxes are a zero-sum game — what one property owner doesn’t pay will be picked up by someone else,” according to the State Department of Taxation and Finance. If one property is significantly underassessed, its owner is paying too little in taxes, while other property owners subsidize the under-assessed property’s share of the tax burden: “The more a property increases in value in contrast to that of its neighbors without its assessment being adjusted, the more it will be underassessed.”

In Southampton, where there is a wide disparity in property values, there is great inequity in assessment, board members said. Properties valued in the tens of millions of dollars, Wolham agreed, are greatly underassessed.

“Who makes up for that? The little guy — families, seniors are being overassessed,” he said.

Residents in modest houses in places like Hampton Bays and Noyac feel that they are overtaxed, Councilman Michael Iasilli said.

A reassessment would not result in the town collecting more tax revenue; rather, it is intended only to equalize the distribution of property tax among residents.

The board voted to freeze annual property assessments in 2019, which Councilman Tommy John Schiavoni, who was on the board at the time, said happened because the value of properties in some areas was fast accelerating, and some property owners, through no action of their own, were seeing large increases in their tax assessment, and tax bills, a result of neighboring properties selling for high prices. The COVID-19 pandemic in 2020 caused a further spike in real estate prices, he said.

That year, the town maintained 100 percent market value, meaning it was assessing at full value, because the analysis was based on sales from July 1, 2018, through June 30, 2019. That continued until 2022, Goree said, when the level of assessment fell to 79 percent. Properties assessed at $500,000, she said, should have been assessed at closer to $800,000 or even $1 million, according to the market.

Based on an analysis Wolham provided in February, “Our level of assessment is now going to be about 63 percent for the assessment roll coming out next month,” Goree said.

She told the board that a short video, “How property assessment and taxation works,” is featured at the assessor’s office page on the town’s website, and invited the public to view it. The video can also be viewed via YouTube.