Town considers homestead exemptions for targeted tax relief after revaluation

More than a year after Woodbridge officials decided against phasing in the Town’s 2024 property revaluation, a Board of Finance subcommittee is exploring whether there may be another way to provide tax relief — and whether that relief can be targeted specifically to homeowners who experienced the largest tax increases.

The Board of Finance’s Homestead Exemption Subcommittee met Thursday, August 13 in the Selectmen’s Boardroom at Town Hall to continue its review of options available under Connecticut’s Homestead Exemption Act and other possible mechanisms for providing tax relief (see agenda).

The subcommittee reviewed spreadsheets modeling how different exemption levels would affect individual residential properties and other portions of the Town’s grand list. Members also discussed whether some form of relief could be designed around the impact of the recent revaluation rather than provided broadly to all eligible homeowners.

No video recording was made of the meeting, and the subcommittee did not vote on any recommendation. The meeting lasted just under one hour.

From revaluation to tax relief

The question of whether Woodbridge should soften the effects of revaluation dates to early 2025, when the Town’s new property assessments were first being incorporated into the budget process.

The revaluation itself was intended to do more than update individual property values. As the Town explains in its revaluation FAQ, changes in economic conditions can cause properties to become overvalued or undervalued relative to comparable properties between revaluations. Revaluation is intended to correct those disparities and, in the Town’s words, ensure that property owners “pay their fair share of taxes.”

During a February 4, 2025 joint Board of Selectmen and Board of Finance budget meeting (see video, linked below), Town Assessor Marsha Benno described the revaluation as “a success,” saying it had brought property values up to the current market. Residential values had increased by about 60% on average since the previous revaluation in 2019, although increases varied considerably among properties.

Benno cautioned against judging an assessment by the percentage it had increased. Residents comparing their increase with a neighbor’s, she said, should instead ask whether the new market values of comparable homes were themselves comparable. A property that had been over- or undervalued in 2019 could experience a different percentage change when brought to its 2024 market value.

By May 7, 2025, after the tax implications of the revaluation had become clearer, the Boards of Selectmen and Finance held a special joint meeting (see video, linked below) specifically to examine whether the Town should phase in the new assessments. Officials acknowledged that some individual tax increases were “staggering” and reviewed a phase-in with Town counsel and the Town’s assessment and data consultants.

Benno stated then that the uneven changes were not necessarily a flaw in the revaluation. “The revaluation is supposed to be a redistribution of the tax burden to create equality and fair assessments” based on the market, she said. A phase-in, she warned, would disrupt that redistribution.

When a board member noted that the increases had not fallen evenly across different types of homes, Benno said that was inherent in a market-based revaluation. Different styles of houses can appreciate at different rates depending upon market demand, she explained, adding that “that’s the way that you’re redistributing the tax burden.”

The May analysis also showed that the effects fell differently across the residential market. The Town’s consultant said officials had specifically examined higher-value Woodbridge properties — roughly those valued at $1 million and above — and found that, although most had increased in value, their percentage increases were “disproportionately lower” than those of some smaller properties. Board members also pointed to the shortage and strong demand for certain types of housing in Woodbridge as a factor behind the much larger increases experienced by those homes.

In other words, the uneven changes reflected the market forces the revaluation was intended to capture: different types and values of homes had not appreciated at the same rate.

The Town ultimately did not phase in the revaluation. Now, more than a year later, the Homestead Exemption Subcommittee is confronting a related but somewhat different question: whether the Town should provide tax relief after the fact and, if so, whether it can direct that relief toward homeowners whose tax burden increased the most.

That distinction is important to the policy discussion now underway. Providing targeted relief because a homeowner’s tax increase was especially large would not alter the property’s new market value, but it could moderate some of the redistribution that the revaluation was designed to produce. A broad homestead exemption, on the other hand, would make a different policy choice: it would give qualifying owner-occupied homes preferential tax treatment as a class, regardless of how much their values changed in the 2024 revaluation. The resulting higher mill rate would shift a greater share of the tax burden to non-exempt property, including commercial and non-owner-occupied residential property.

Modeling a homestead exemption

Spreadsheets displayed at the August 13 subcommittee meeting broke down the Town’s grand list among residential, commercial, apartment, industrial, vacant-land and other property classifications and included parcel-level residential data. The model allowed different homestead exemption assumptions to be applied to residential properties and showed the resulting changes in taxable assessments and property taxes.

Under one scenario discussed by committee members, a 15% exemption capped at $100,000 of assessed value was projected to increase the mill rate from the current 33.99 mills to approximately 39.19 mills. Members discussed an estimated average annual benefit of about $278 for residential properties benefiting from the exemption.

The reason the mill rate rises is central to understanding the proposal. A homestead exemption does not reduce the Town budget or change the overall amount to be raised by local taxes. Instead, it removes some assessed value from qualifying homes — and with a smaller taxable grand list supporting the same levy, the mill rate must rise. The result is a redistribution: many qualifying homeowners would pay less, while properties receiving little or no exemption would pay more.

That tradeoff is especially consequential in Woodbridge because there is relatively little nonresidential tax base available to absorb a shift away from qualifying homes. The Town’s commercial base represents only a small share of the grand list, while overall grand-list growth has historically been limited. Under a broad exemption, the smaller taxable grand list requires a higher mill rate to raise the same levy, shifting additional taxes to properties receiving less or no exemption. Avoiding that shift would require the Town to raise less through property taxes — through lower spending, use of reserves or another source of revenue.

What would that mean for homeowners?

The 15% figure does not mean a homeowner would receive a 15% reduction in the property tax bill. The exemption applies to the home’s assessed value. In Connecticut, assessed value is generally 70% of market value.

For example, a home with a market value of $500,000 would have an assessed value of $350,000. Under the scenario discussed by the subcommittee, 15%, or $52,500, would be exempt, leaving $297,500 taxable. At the modeled 39.19-mill rate, the resulting tax would be approximately $11,659, compared with about $11,897 at the current 33.99-mill rate — an annual savings of about $237.

In this modeled scenario, the $100,000 cap becomes increasingly important as home values rise. At a 15% exemption, the cap is reached at an assessed value of approximately $666,667, corresponding to a market value of about $952,000. Above that point, the exemption stops increasing even though the higher mill rate continues to apply to the remaining assessment. The benefit therefore begins to shrink and, at a market value of roughly $1.08 million under this model, eventually reverses into a tax increase.

Illustrative effect of the 15% / $100,000-cap scenario

Chronicle calculations based on the scenario discussed at the meeting; figures are rounded to the nearest dollar and are illustrations, not individual tax estimates.

The examples demonstrate why the benefit does not simply increase along with the value of a home. In these illustrations, savings rise from about $119 for a $250,000 home to about $356 for a $750,000 home. Once the $100,000 cap is reached, however, the benefit begins to decline. A $1 million home would save about $279, while a $1.25 million home would pay about $631 more and a $1.5 million home about $1,541 more.

The choice also has implications beyond a single tax year. The 2024 revaluation established a new market-value baseline that will remain the foundation of the grand list until the next revaluation, subject to ordinary changes in individual properties and the grand list. A continuing homestead exemption — one option under consideration — would overlay that market-value system with an ongoing policy preference for qualifying owner-occupied homes. Another approach discussed by the subcommittee would instead target households with the largest revaluation-driven increases, tying the relief more directly to the effects of this particular revaluation.

At the next revaluation, market forces could redistribute values differently again. Properties that appreciated most rapidly in the last cycle may not do so in the next, while other portions of the residential grand list could gain value more quickly. That sharpens a longer-term question the Town may need to confront: whether the objective is an ongoing tax preference for owner-occupied homes, or temporary relief from the particular redistribution produced by the 2024 revaluation.

That concern about what happens over the remainder of a revaluation cycle was also raised in May 2025: Benno cautioned that officials could model an intervention’s first-year benefit but could not know what subsequent grand-list growth, budgets and mill rates would look like. Town counsel separately emphasized the importance of periodically equalizing assessments as market values change.

Could existing funds provide another option?

Committee members also discussed whether relief might be provided through existing Town funds rather than entirely through the property-tax structure. Unlike a homestead exemption, which would require the Town to complete the ordinance process in time to apply it to the upcoming grand list, an approach using existing funds potentially could provide relief without that same timing constraint, subject to the required process and legal authority.

The idea could also change the financial mechanics of the relief. Under the homestead scenario modeled by the committee, reducing taxable residential assessments while maintaining the same overall tax levy would require the mill rate to rise. Drawing on fund balance to cover some or all of the cost could instead reduce the amount that would need to be recovered through that higher mill rate.

The tradeoff would be that the relief would then be financed with Town reserves rather than redistributed entirely among taxpayers. The question is not new: during the May 7, 2025 discussion of a possible revaluation phase-in, Genovese explained that if the Town wanted to avoid recovering lost taxable value through a higher mill rate, the alternatives were to “either draw from fund balance or cut the budget.”

At the August 13 meeting, subcommittee members also asked whether a “fund balance approach” might give the Town greater flexibility to target assistance toward homeowners whose taxes increased most sharply following revaluation.

Can relief be targeted?

That left what emerged as a central unresolved question in the committee’s discussion: Can Woodbridge provide greater relief specifically to homeowners whose taxes increased the most as a result of revaluation?

Members discussed identifying properties whose tax increases exceeded certain thresholds and whether relief could be made more “meaningful” for the residents most affected, rather than applying it broadly. But whether the Town has the legal authority to distinguish among homeowners based on the magnitude of their revaluation-related tax increases remains unresolved. Members asked Genovese to seek guidance from the Town’s legal counsel, along with answers to outstanding data questions from E-Quality. 

The distinction could ultimately determine which approach the Town pursues. A broad homestead exemption would provide an ongoing benefit to qualifying owner-occupied homes while shifting more of the tax burden to non-exempt property. A more targeted approach would instead seek to moderate some of the redistribution produced by the 2024 revaluation for homeowners who experienced the largest increases.

No recommendation yet

The possibility of pursuing an approach outside the Homestead Act also appeared to ease some of the committee’s immediate timing pressure. Members had been working against the timetable for adopting an ordinance in time to affect the upcoming grand list, but questioned whether they needed to pursue that route if another form of relief remained available.

As the meeting wound down, members agreed they did not yet have enough information to bring a proposal to the Board of Selectmen later this month — and debated whether they needed to bring a recommendation at all at this time if they were not seeking an ordinance. Members noted that significant questions remained unanswered, and one described the proposal as not yet “fully baked,” adding that the group had “way more questions than we have answers.”

Waiting could also give the Town another option under the Homestead Act. Members discussed a new flat $50,000 exemption option that would be available for assessment years beginning on or after October 1, 2027, giving the Town another alternative to the percentage-based approach currently being modeled (see OLR Special Report). They noted that a $50,000 exemption would provide greater relief to some homeowners but would also produce a larger shift in the tax burden elsewhere.

Taken together, the discussion suggested less urgency to settle on an ordinance this year. If another mechanism using existing funds proves legally available, the Town could explore more targeted relief without relying solely on the mill rate; if it ultimately prefers a Homestead Act approach, waiting would allow the subcommittee to consider that additional option beginning with the October 1, 2027 assessment year.

With answers to those questions still pending, members discussed what they would need to bring to the upcoming Board of Selectmen meeting for a broader discussion of the available options, and whether the subcommittee needed to meet again beforehand. The answers themselves could help determine the next step: if the Town has discretion to target relief based on the impact of revaluation, additional options could open up; if not, the discussion would return to broader approaches that treat eligible homeowners alike. With that still unresolved, the subcommittee did not settle on another meeting date before the meeting concluded.