Property Tax Valuation Increases Taxes for Group of Condominium Owners

The State of Rhode Island and its municipalities routinely perform widespread property valuations on private property in the state to determine the property tax burdens of property owners. In the tax years after a valuation is completed, property owners are required to pay taxes based on the updated amounts until another valuation is complete. Tax valuations are not necessarily completed annually, with some jurisdictions performing a valuation as rarely as every five years. Valuations are mandated to be fair and nondiscriminatory. The Rhode Island Supreme Court recently reversed a trial court ruling that found the City of Providence treated a group of condominium owners unfairly by arbitrarily performing a tax valuation of their property.

The plaintiffs in the recently decided case were a group of condominium owners who filed suit against the City of Providence after they were sent increased tax bills for 2014 despite no citywide tax valuation having been performed in 2013. The plaintiffs argued that they were selected to pay increased taxes for 2014 while other property owners in the city were paying lower taxes based on a 2012 valuation. The city responded that the condominium complex had been subject to a tax stabilization agreement (TSA) from 2004 to 2014, and that the expiration of that agreement justified a reevaluation of the property in 2013 to determine the owners’ 2014 tax burden.

At trial, the judge sided with the property owners, finding that no other previously existing properties were given a tax valuation in 2013 and that the city was arbitrary, selective, and discriminatory when choosing to perform a tax valuation on the condominium project. The city appealed the ruling to the Rhode Island Supreme Court. On appeal, the high court found that the city was justified in performing a tax valuation of the plaintiffs’ property in 2013. The judge noted that the tax stabilization agreement that determined the plaintiffs’ tax burdens from 2004 to 2013 was very favorable to the plaintiffs. With the expiration of the agreement in 2013, the city needed to determine the actual taxable value of the property for 2014. The court ruled that under state law the city was allowed, and even required, to perform the 2013 valuation. As a result of the Supreme Court ruling, the plaintiffs will be required to pay the amount that had originally been billed for 2014.

Do You Have Questions for a Real Estate Tax Attorney?

If you or someone you know has questions about a property tax issue or other tax concern, the help of an experienced Rhode Island real estate attorney may be just what you need. Property tax obligations can vary, and municipalities may have made mistakes in determining your tax burden The Qualified Rhode Island real estate lawyers with Bilodeau Capalbo understand real estate taxes and have experience handling property tax disputes. The lawyers at Bilodeau Capalbo also advise clients with other real estate issues, including transactions, contracts, zoning, and development concerns. Call us at 401-300-4055 to discuss your issue and schedule a free consultation with a qualified Rhode Island real estate attorney today.