As the value of old cars increased, many CT residents received larger property tax bills

Although Connecticut recently passed a lower cap on the property tax rate for motor vehicles, many residents are seeing an increase in their tax bill as older cars have increased in value over the past couple of years.

Norwalk resident Polly McNamee received her latest bill in late June and was surprised to find that the property tax on her 2015 Honda CRV had increased by $55 compared to last year’s bill.

“The mill rate has not changed; the value of the car changed because the value of the car increased from last year. In today’s economy, it’s kind of a slap in the face,” McNamee said. “Historically, the car has depreciated every year, and yes, it’s a strange economy, but there has to be some consideration from the taxpayer here.”

A retiree, McNamee said she got a heads up on the larger bill by checking the estimated cost online before the bill arrived in the mail. But still, she was shocked by the growth.

Residents of more than 70 municipalities in Connecticut were expecting lower auto tax bills after the new property tax cap on vehicles went into effect July 1, lowering it from 45 mills to 32.46 mills.

The new cap, which was passed as part of the state budget in May, reduced the amount each municipality can levy on vehicle taxes.

Previously, cities and towns could pay up to $45 in taxes per $1,000 of assessed value, or 45 mills, according to General Assembly documents. Now, the cap is $32.46 in taxes per $1,000 of assessed value.

With shortages of cars and car parts, especially the necessary computer chips, due to the ongoing COVID-19 pandemic and rising inflation, the cost of used and new cars has risen sharply, said Chris Collibee, director of communications at the Office. of Connecticut Politics. and Management.

The mill rate cut saved taxpayers statewide about $100 million, but in many cases it was offset by rising vehicle values ​​this year, Collibee said.

“Taxpayers have also seen an average increase of 26 percent in the assessed values ​​of their vehicles, which are currently based on fair market value,” Collibee said. “While some taxpayers are still seeing a net increase in their tax bills compared to last year, that increase would certainly be much higher if the state had not imposed a lower mill rate cap and would have provided funding to cities.”

Based on Connecticut state law, a car’s appraisal is 70 percent of the average retail value. To determine this, appraisers use average retail values ​​provided by the National Automobile Dealers Association each year.

For vehicles not included in the association’s list, appraisers are responsible for determining the car’s value, according to state law.

In the latest budget bill, the method for determining vehicle value will change, easing the burden on residents in the future, Collibee said.

“The budget bill also changes the basis for assessing vehicles from market value to a depreciation schedule that begins in October 2023, which will provide more stability and predictability for taxpayers,” Collibee said.

The state also increased the property tax credit from $200 to $300, which applies to a vehicle that is sold, totaled, stolen or registered in another state.

“At the end of the day, the state has tried to mitigate this and provide relief to taxpayers knowing that costs have increased. “We all live and work in the state, we all understand that vehicle values ​​have gone up,” Collibee said.

Norwich resident Mike Caprio received his tax bill earlier this month and noticed a similar increase in the value of his 6-year-old car.

“Yes, the mill rate went down, but the city tripled the assessed value on my 2016 car,” Caprio said. “Thus, increasing my tax from $199 in 2021 to $513.52 this year.”

As the state works to mitigate the impact on taxpayers due to auto parts shortages and inflation in future payments, July tax bills will still be higher for many, officials said.

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