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Split Tax Rate <br /> A residential factor of less than '1' reduces the share of the tax levy paid by the <br /> Residential & Open Space classes and increases the share paid by the Commercial, <br /> Industrial & Personal Property classes. The result is two tax rates: one for Residential <br /> & Open Space properties and a second, higher rate for CIP properties. A factor greater <br /> than '1' may be adopted, which would have the opposite effect. <br /> Basic Minimum Residential Factor Parameters: <br /> 1. Commercial, Industrial & Personal Property taxpayers cannot pay more than 150% <br /> of their Full and Fair Cash Value (FFCV) share of the tax levy (single rate share). <br /> 2. Residential & Open Space taxpayers must pay at least 65% of their Full and Fair <br /> Cash Value share of the levy. <br /> 'Residential Exemption <br /> The selectmen may grant a residential exemption to all Class One, Residential <br /> properties that are the principal residence of the taxpayer on January 1. The only <br /> validation for proof of residence provided by law is a copy of the resident's tax return. <br /> Amount <br /> The exemption may not exceed 35 percent of the average assessed value of all Class <br /> One, Residential properties. To calculate the exemption, the assessors first determine <br /> the average assessed value of all residential parcels. The adopted percentage is <br /> applied to this amount. The assessors must then determine which properties qualify <br /> for the exemption. (This step can take upwards of six months and is critical to avoid <br /> violating Prop 2 % .) The assessed valuation of each residential parcel that is the <br /> primary residence of the taxpayer is then reduced by the same amount. <br /> Impact on the Tax Rate <br /> Adopting a residential exemption increases the residential tax rate. The amount of the <br /> tax levy paid by the class remains the same, but because of the exempted valuation, it <br /> is distributed over less assessed value. This higher rate creates a shift within the class <br /> that reduces the taxes paid by homeowners with moderately valued properties. The <br /> exempted taxes are paid for by the owners of rental properties, second homes and full <br /> time residents with higher valued homes. <br /> - 3 - <br /> C:\Users\tmcook\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\234694UO\Overview of Classification4.docx <br />