South Portland, Maine, was built on the industries of shipping, shipbuilding, and fishing. The city has long been an important hub for retail and industry, and it has also grown into a popular tourism destination. The fourth largest city in the state of Maine, South Portland is no longer a well-kept secret, and travelers from across the nation come to the region to enjoy the beautiful coastline, lighthouses, and green spaces.
Arts and culture are also a significant draw, as are the nearby museums and historical sites that explore the rich history of South Portland. New bistros, brewpubs, and shopping options have developed to meet the needs of visitors and locals alike.
Growth and Tourism Increases Property Values
Along with the new developments and increasing interest in the South Portland area comes increased property values. A recent citywide property revaluation has caused a stir in the area, with homeowners and business owners following closely to see how their property taxes will be affected, as well as how the increase in value might change their prospects when it comes to selling a home or commercial property.
Residents have understood that property values were on the rise, but the recent revaluation serves to quantify that trend. Even though many real estate professionals and accountants believed that COVID-19 would cause a sharp real estate market decline, those projections did not come to pass.
Across the state of Maine, single-family home sales increased by more than 9% in 2020. The sale price of those properties increased nearly 14%, with a median home price of $256,000.
Why was a Revaluation Done Now?
As real estate markets across the state of Maine heated up, some areas that have gone through recent revaluations were almost immediately outdated. Other areas, including South Portland, have not had a revaluation in nearly a decade and postponed scheduled revaluations due to uncertainty over how COVID-19 might affect the market.
With more than half of South Portland homes selling for more than the asking price in 2020, it would be hard to argue that a revaluation was not appropriate. That said, homeowners concerned about an unexpected hike in their tax bills are not universally happy about the recent revaluation numbers.
There’s also a matter of adhering to Maine’s constitution, which clearly states that property revaluation must occur at least once every ten years. That rule isn’t often enforced, but since South Portland last went through the process 15 years ago, the time for revaluation has come.
What is the New Tax Rate?
The new tax rate has not yet been set, but the calculations are expected to come out within days. Tax bills will be mailed out shortly thereafter, leaving residents to frantically try to do the math themselves in anticipation of increased taxes.
Property owners who saw a significant increase in their property values since the last valuation can expect to receive a larger tax bill, while those who saw less dramatic increases may see only a modest increase in taxes.
With many long-time residents living on retirement savings and already struggling to make ends meet, a big tax hike could be far more challenging than for families with adults still engaged in the workforce. On the other hand, property owners who have been thinking of selling may be elated to see their homes’ value increase on paper.
The coming weeks will bring clarity to the matter, and perhaps shift the focus to the area’s commercial tax base.