Taxes on CT cars are higher for many as car values ​​increase

Even though Connecticut recently passed a lower cap on the motor vehicle property tax rate, many residents are seeing an increase in their tax bill as the value of older cars has increased over the past two years.

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

“The rate per mile has not changed; the value of the car has changed because the value of the car has increased since last year. In today’s economy, that’s kind of a slap in the face,” McNamee said. “Historically the car has depreciated every year, and yes, it’s a wobbly economy, but there should be some consideration for the taxpayer here.”

Retired, McNamee said she was notified of the larger bill by checking the expected cost online before the bill arrived in the mail. But still, she was shocked by the increase.

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

The new cap, which was approved as part of the state budget in May, reduced the amount each municipality can charge for motor vehicle taxes.

Previously, cities could charge up to $45 in taxes for every $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 taxable value.

With a shortage of cars and auto parts, especially necessary computer chips, due to the ongoing COVID-19 pandemic and rising inflation, the cost of used and new cars has increased dramatically, said Chris Collibee, director of communications at the Connecticut Office of Policy. and management.

The lower per-mile rate saved ratepayers statewide about $100 million, but in many cases it was offset by higher vehicle values ​​this year, Collibee said.

“Taxpayers also saw an average 26% increase 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 over last year, this increase would certainly be much higher if the state had not imposed a lower rate cap and had not provided funding to cities.”

According to Connecticut state law, a car’s appraisal is 70% of its average retail value. To determine this, appraisers use the average retail values ​​provided annually by the National Automobile Dealer’s Association.

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

In the latest budget bill, the method of 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 an amortization schedule beginning in October 2023, which will provide more stability and predictability for ratepayers,” Collibee said.

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

“Ultimately, the state tried to mitigate this and relieve taxpayers knowing that costs have gone up. We all live and work in the state, we all understand that vehicle values ​​have gone up,” a said Collibee.

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 per-mile rate was lowered, but the city tripled the assessed value of my 2016 car,” Caprio said. “So increasing my tax from $199 in 2021 to $513.52 this year.”

As the state works to lessen the impact on taxpayers from auto parts shortages and future payment inflation, July’s tax bills will be even higher for many, officials said. .

abigail.brone@hearstmédiact.com

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