Chatham Tax Rate Drops As Property Value Increase Slows

CHATHAM – For the first time since the pandemic, growth of the town’s overall property values dropped below double digits, even as it topped out at more than $12 billion for the first time ever.

As determined by the assessing department, the town’s total valuation for the past year was $12,341,273,730, a 6.3 percent increase. The last time the increase in evaluations was in single digits was in fiscal 2021, when it was at 1 percent. Annual evaluations reflect the previous year’s property sales and new growth; after 2020, the increases surged as a result of heavy real estate sales during the pandemic. In fiscal 2022 values went up 10 percent; in fiscal 2023 the increase was 20 percent, and in fiscal 2024 values jumped 17 percent.

“Values are still going up, don’t get me wrong,” said Assessing Director Ardelle Kelley. “But they’re not going up at the pace they were.”

At a public hearing last week, the select board voted to set a single tax rate for all property classifications, following the recommendation of the board of assessors. The projected fiscal 2025 rate of $3.47 per $1,000 value is 10 cents lower than last year’s $3.57 rate, which was the sixth lowest in the state. Most towns have not yet set a fiscal 2025 tax rate, but the new rate is likely to remain among the lowest in the state.

Under state law, officials can set different rates for residential and commercial properties, but the shift tends to make a big difference for commercial property while having a smaller impact on residential tax bills. 

The board also voted to reject a tax exemption for property owned by year-round residents. Under recent changes to state law, the exemption can be as high as 50 percent for residential properties occupied by year-round residents. At a 10 percent exemption, the average savings would be $344; at 35 percent, $1,300; and at 50 percent, $2,009, according to Kelley. 

Four Cape towns — Provincetown, Wellfleet, Truro and Barnstable — have adopted residential property tax exemptions, she said. The board of assessors opposes doing so, which would shift the property tax burden to nonresidents owners, according to Kelley. The housing bill that included the exemption increase contains other options for promoting year-round housing, she added.

Currently, 58 percent of the town’s properties are owned by nonresidents, Kelley said, with 42 percent owned by residents. “That’s our best estimate,” she told the select board. The split was closer to 60-40 prior to the pandemic, she added.

“We’re seeing actually more and more people moving into town,” she said. “It will be interesting to see if that trend continues or if it will stop.”