SOUTH PORTLAND — The first citywide property revaluation in 15 years has pushed up residential property assessments an average of 45 percent, with homes in popular waterfront neighborhoods increasing as much as 70 percent amid a pandemic-fueled real estate boom.

The residential tax rate has yet to be set, but tax bills to be mailed in the coming weeks are expected to increase an average of 18 to 20 percent, City Assessor Jim Thomas said.

Commercial property assessments, meanwhile, increased an average of 25 to 28 percent, although new values in that sector have yet to be finalized and fully analyzed, Thomas said.

“In 15 years, pretty much everything has gone up in value,” Thomas said Tuesday. “We didn’t count on the craziness of the last three years and the COVID-19 pandemic. We delayed the revaluation because we thought real estate prices would tumble. But that didn’t happen.”

Instead of tanking, housing prices soared across Maine, where single-family home sales increased more than 9 percent in 2020, and the median home price increased nearly 14 percent, to $256,000, according to the Maine Association of Realtors.

With such a hot market, even cities and towns that had recently updated assessed values were suddenly outdated, and pressure increased in South Portland and neighboring Portland, where revaluations had been put off for more than a decade. Portland residents, who have been bracing for similar increases, began receiving their new assessed property values this week.

In South Portland, even in less tony areas, 55 percent of homes sold for more than the listing price in 2020, according to Redfin.com. A home in the Willard Beach area that sold for $400,000 in 2018 went for $585,000 two years later – a 46 percent increase, Thomas said. A home in the Cash Corner neighborhood, where Broadway crosses Route 1, sold for $275,000 in 2019 and again in 2020 for $407,100 – a 48 percent increase. Neither house had been significantly improved, Thomas said.

Based on new home values posted in South Portland last week, residential tax bills are expected to increase an average of 18 to 20 percent, Thomas said. The residential portion of the taxpayer pie – currently 54 percent – is expected to increase about the same amount, fulfilling concerns about a shift in tax responsibility from commercial to residential property owners.

With the revaluation, the median assessed value of single-family homes in South Portland increased 41 percent, from $204,000 to $287,000, Thomas said.  The tax impact of that increase will be mitigated somewhat because the tax rate is expected to drop, from $19.75 to $16 or less per $1,000 of assessed property value.

Thomas expects to set the new tax rate late next week. Tax bills would be mailed a couple weeks later.

In the meantime, many homeowners are checking their new assessments and trying to figure out what their tax bills will be, including Diane and Dan Romano, who raised their concerns with city officials last spring.

The assessed value of their Simonton Street bungalow, a few blocks from Willard Beach, has increased 53 percent, from $283,000 to $433,100. Their annual property tax bill is set to increase about $1,400, or 27 percent, from $5,100 to more than $6,500, based on the estimated $16 tax rate and after the $25,000 homestead exemption. That’s a big jump from the usual $100 annual increase.

“That’s close to $120 a month,” said Diane Romano, an accounting clerk. “I feel a sense of relief that it’s not worse. I was thinking it might be a $2,500 increase.”

Diane and Dan Romano worried last spring that a citywide revaluation in South Portland might increase their annual tax bill as much as $2,500, but they are relieved that it likely will be a lot less. Shawn Patrick Ouellette/Staff Photographer

Some of Romano’s neighbors have seen their assessed values increase 60 to 65 percent, she said. Last spring, Romano told city councilors that she was prepared to sell her plasma to cover the tax increase. Now, she plans to ask her boss for a small raise. Her husband is self-employed.

“We live pretty close to the bone as it is. We don’t even have cable television,” Romano said Tuesday. “But I feel for people living on fixed incomes. Fortunately, we’re only 57. If we were retired, that $1,500 might as well be $15,000.”

A revaluation is a community-wide update of assessed property values that are tied to market values and are the basis for annual tax bills. In general, property owners whose new assessed values have increased more than the average will see their tax bills go up, while property owners whose values have increased less than the average will see their tax bills drop.

Both South Portland and Portland put long-delayed revaluations on hold last year because of the pandemic. Neither had updated property values citywide for 15 years and their overall property assessments had fallen below 70 percent of market value, a major legal trigger for revaluations.

The state Constitution also says revaluations must be done at least once every 10 years – a law that isn’t generally enforced – and it requires property taxes to be apportioned and assessed equally according to just value, which the courts have determined is market value.

In South Portland, the old precept about revaluations is expected to hold true: About one-third of tax bills will go up, one-third will go down and one-third will stay the same. However, the first category likely will be mostly homeowners given the recent spike in residential market values.

In communities where commercial properties have gained value but haven’t kept up with residential values, revaluations are shifting some of the tax responsibility onto homeowners.

Thomas is concerned that South Portland’s revaluation may further erode a commercial tax base that was under significant strain before the pandemic, including the retail area around the Maine Mall.

“Right now my real worries are restaurants and retail strips,” he said.

Marty Riehle shares Thomas’ concern for preserving the commercial tax base. Riehle and Janice Childs bought their single-family home on Simonton Street in 2009. They paid $450,000 for their cape, which was assessed at $351,800 before the revaluation.

Now, it’s assessed at $541,700 – a 54 percent increase – with a taxable value of $516,700 after the $25,000 homestead exemption. Their annual tax bill is set to increase about $1,817, or 28 percent, from $6,455 to $8,272. Riehle said they can afford the increase but worries about others who are on fixed incomes.

“It’s why people in South Portland should be concerned about businesses,” said Riehle, a retired hospital administrator who sits on the city’s Economic Development Committee.

Riehle said South Portland has developed a reputation for being anti-business in recent years, and while the city should be selective in the types of businesses it promotes, it must recognize that a thriving business community helps shoulder the tax burden.

“People have got to support our businesses,” Riehle said.


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