Property taxes will hold steady or be slightly lower for most South Portland homeowners, even though the tax assessor is about to decrease most of the city’s property values by 5 percent.

That was the message delivered Monday night to the South Portland City Council by Tax Assessor Elizabeth Sawyer and Finance Director Greg L’ Heureux.

“Generally speaking, taxes will be roughly the same or slightly less for the average owner,” Sawyer said. “There are no big changes, just refinements.”

At issue is a review of the city’s 9,000 properties that Sawyer just completed as real estate values have dropped in the economic recession.

Although final numbers are not in, Sawyer predicted that taxes will change little for the “vast majority” of property owners.

The reason is that the property tax rate also will increase by 5 percent, from $14 to $14.70, to raise $52 million in revenues required to fund the city’s budget for fiscal 2010, which started July 1.

“We need to increase the rate to basically raise the same amount of money,” Sawyer said.

But some homeowners will see a sharper decrease than 5 percent in their property valuation, Sawyer said.

This includes some condominiums as well as single family homes on high-traffic roads, such as Broadway.

She also said waterfront properties have not lost as much value as most other residential properties in the city.

The city lowered the value of most waterfront homes by less than 5 percent, which will result in higher property tax bills when the tax rate increases, Sawyer said.

She offered a handout listing some properties that will see significant fluctuations in city valuations.

Examples included a home at 1776 Broadway valued at $206,400 in 2008 and $191,500 in 2009 – a 7 percent drop in value. The annual property tax bill will drop by $83.

By contrast, a waterfront home at 2 Drew Road, in Danforth Cove, was valued at $1.39 million in 2008 and $1.36 million in 2009 – a 2 percent decrease in value. The annual tax bill will rise $516 on a $19,000 tax bill.

As the city lowers values for most residential, commercial and industrial properties, it is leaving untouched the value or personal property that is taxed by the city.

Personal property includes business equipment, furniture, fixtures, computers and cash registers in business settings.

The result will be a 5 percent increase in taxes on personal property, she said.

Sawyer explained to the Council that a retail business with $50,000 in equipment is taxed $700 yearly. That tax bill will increase to $735, reflecting a 5 percent increase in the tax rate.

Sawyer estimated that 10 to 12 percent of the tax base is from personal property tax revenues. “There is some shifting of the tax burden from real estate to the personal property tax side,” she said.

South Portland’s single largest tax payer, the Maine Mall, will see a modest increase in its $3 million tax bill, at roughly 1.12 percent, she said, after its property value of $236 million is lowered by 4 percent.

Tax bills that go out in August will reflect the changes. Mayor Tom Blake suggested that the Tax Assessor include a memo with the tax bills explaining the changes in property values and the tax rate.

“The Assessor’s Office has spent a considerable amount of time over the last year monitoring the real estate market in preparation for the commitment of taxes,” City Manager Jim Gailey said in a memo to the Council.

“We have fielded many calls and requests for inspections of properties where taxpayers have concerns about the assessed valuation vs. the market value,” he said. “In these challenging economic times, homeowners and owners of investment property alike are keenly aware of the market conditions and want to know that they are being treated fairly…”

City leaders explained how the value changes will affect a median home.

Last year’s median home in South Portland was valued at approximately $213,000, and the homestead exemption was $13,000, according to the city. The annual tax bill, at a $14 tax rate, was $2,800.

When the home value is lowered by 5 percent this year, the new median value is $202,300. The homestead remains at $13,000, reducing the taxable value to $189,300.

With the projected tax rate of $14.70, the annual tax bill is $2,782.71, slightly below last year’s tax amount.