Opinion ID: 3171459
Heading Depth: 1
Heading Rank: 2

Heading: Valuation of the Sudbury Portion

Text: ¶ 14. We next address taxpayer’s second argument, which is that the trial court’s conclusion that the fair market value of the Sudbury portion was $177,445 is not supported by the evidence. Here, taxpayer objects to Sudbury’s method of calculating the land’s value and tax burden through the use of land tables, schedules, and adjustments that take into account multiple 7 factors affecting the value of the land. Notably, the formula includes an “easement” adjustment to reflect that the land is merely a small portion of a much larger parcel. Taxpayer argues that this adjustment is insufficient and that that this formula should not be applied to the land because it was developed to value stand-alone parcels, not portions of land that belong to larger parcels. Instead—without proposing an alternative method—taxpayer contends that the land should be ascribed a lower value because it cannot be independently developed, accessed, or sold apart from the larger parcel. ¶ 15. We have long recognized that Vermont towns have discretion to use different appraisal methods to value property according to fair market value. See City of Barre v. Town of Orange, 138 Vt. 484, 486, 417 A.2d 939, 941 (1980) (“[M]any different methods exist for determining fair market value.”). However, as a logical extension of our previous observation of the Proportional Contribution Clause, towns’ appraisal methods must reflect fair market value, and this can be accomplished only by taking into consideration all elements that combine to give value to a property. See also Bookstaver v. Town of Westminster, 131 Vt. 133, 137, 300 A.2d 891, 893 (1973) (noting that “[t]here is no one or controlling factor.”). Sudbury heeds our holdings concerning the importance of fair market value and multiple-factor assessments. Its method begins with a general land schedule provided by the State of Vermont and based on actual sales in the town over the previous three years. It then makes adjustments based on factors including terrain, accessibility, septic systems, and quality of structures. Notably, Sudbury’s assessment system has been accurate over the years; the trial court found that its assessed values are very comparable to actual sales. ¶ 16. In the specific case of Wanee’s assessment, the trial court found the following facts. Sudbury started with a schedule that was based on a finding that the average fair market value for a lot on Lake Hortonia is $1000 per linear foot of lake frontage. Applying this schedule to Wanee’s total lake frontage, it determined that the property’s value before 8 adjustments was $385,000. To this base value, Sudbury assigned factors of: (1) 0.80 for land quality because the beach front was overgrown; (2) 1.02 for depth factor because the parcel is slightly deeper than the average lot; (3) 0.70 for amount of lake frontage, which is above average in Wanee’s case, and the per-foot value of frontage decreases as the amount of frontage increases; and (4) 0.80 because the parcel has an easement on it for the community owners and cannot be developed. After accounting for these factors—a multiplication of each factor against the base value—and then adding $1500 to account for two dilapidated structures, Sudbury arrived at a final assessed value of $177,445. ¶ 17. The trial court found that the system used by Sudbury to value taxpayer’s land was accurate, and this finding was supported by the evidence. First, the starting schedule was based on actual sales data. Second, the adjustment factors for properties such as land quality, depth, and lake frontage reflect those elements that we have previously recognized as giving property a market value. Bookstaver, 131 Vt. at 136-37, 300 A.2d at 893 (“The fair market value of property is the price which the property will bring in the market when offered for sale and purchased by another, taking into consideration all the elements of the availability of the property, its use both potential and prospective, any functional deficiencies, and all other elements such as age and condition which combine to give property a market value.”). Finally, we find that the town uses proper bases for determining the degree of adjustment for each factor. The depth factor and lake frontage adjustments are based on numerical charts and the easement adjustment is equal to the easement adjustments for other properties. For the land quality factor, the use of judgment to consider multiple features of the land is reasonable in light of the difficulty of assessing land quality. Moreover, the estimated land values have closely matched historical sale prices. We therefore conclude that Sudbury’s appraisal method conforms to the Proportional Contribution Clause’s fair market value requirement. It is unlike those systems that we have struck down as being unreasonable or too simplistic. See Bloomer v. Town of Danby, 9 135 Vt. 56, 57, 370 A.2d 194, 195 (1977) (striking town’s formula for determining land value, which solely contemplated total acreage and did not adjust for location, type of land, accessibility, or sale of comparable property); Town of Barnet v. New England Power Co., 130 Vt. 407, 413, 296 A.2d 228, 232 (1972) (holding that it was error to restrict appraised fair market value to no greater than net book value). ¶ 18. We further note that this same analysis applies to taxpayer’s argument that Sudbury’s formula should not be applied at all to the land because it was developed to value stand-alone parcels, not portions of land that belong to larger parcels. On this point, taxpayer argues that the Sudbury portion is worth almost nothing because it cannot be sold on its own. But this ignores the trial court’s finding that the Sudbury portion certainly added value to the whole when viewed as part of a larger property. It also ignores our long-standing precedent that contiguous lands should be treated as one under appropriate circumstances. We outlined those circumstances in Neun v. Town of Roxbury, 150 Vt. 242, 244, 552 A.2d 408, 410 (1988): All relevant factors must be considered in determining whether or not property should be assessed as a single parcel, including whether the property was conveyed in one deed, the character of the land and the purposes for which it is used, whether separately deeded tracts are contiguous, and whether the property currently functions as one tract for the owner. We have since reaffirmed those circumstances in several cases concerning the tax treatment of lands lying in more than one town. See Vanderminden, 2013 VT 49, ¶ 12 (holding that taxpayer’s land should be treated as one parcel because “[i]t is covered in one deed, used for one common purpose, and functions as a single tract.”); Bullis v. Town of Grand Isle, 151 Vt. 503, 504, 561 A.2d 1359, 1360 (1989) (affirming that parcels of land that are between a quarter of a mile and one mile apart should not be treated as contiguous for tax purposes). We see no reason to diverge from this precedent. Moreover, we find that the Sudbury and Hubbardton portions together function as one tract; the Sudbury portion enhances the whole by providing the units 10 with lakefront access. We therefore conclude that it is proper to value Wanee’s Sudbury portion as part of the whole parcel. The evidence supports the trial court’s conclusion about its fair market value.