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RESIDENTIAL PROPERTY ASSESSMENT CHALLENGED

Oct. 4, 2001 – Several owners of St. Thomas residential property filed a federal class-action lawsuit this week claiming that the V.I. Tax Assessor's Office improperly assessed the value of their properties, resulting in higher property tax bills.
Plaintiffs Robert Schmidt, Kim Holdsworth, Dori Derr and the Robert Schmidt Development Corp., represented by attorney James Derr, said they were filing the lawsuit on behalf of all Virgin Islands taxpayers whose properties may also have been improperly assessed. The plaintiffs own a total of 11 properties in Estates Peterborg and Lovenlund, the suit states.
The legal complaint, filed in U.S. District Court on Monday, is the companion piece to similar lawsuits filed previously by commercial property owners, Derr said Thursday. The complaint raises similar issues about the method in which Tax Assessor Roy Martin has placed values on properties, a method which the lawsuits claim does not conform to Virgin Islands law.
The V.I. Code states that properties must be assessed at their actual value, using standards such as location, quality of land, any income derived from the property, recent sale price of adjacent properties and other factors.
But the lawsuits claim that the tax assessor instead has used the estimated cost to replace properties — a standard not mentioned in the V.I. Code — which could lead to higher assessments, and thus higher tax bills. The new suit also says that residential properties have not been re-assessed every two years, as the law requires, but that the Tax Assessor's Office has instead applied across-the-board percentage increases that may not reflect changes in the actual value.
The residential property lawsuit has not yet been served on Martin or other V.I. government officials, as the parties to the lawsuit have been in negotiations about how to resolve the dispute, Derr said.
In a settlement reached in the commercial property suit, an independent assessor was assigned to oversee changes made in the Tax Assessor's Office to ensure that assessments were being done according to both the law and nationally accepted standards.
Under that settlement, all commercial properties are to be re-assessed under the new guidelines, an action that Derr said could lead to lower property-tax bills for all V.I. commercial property owners.
Derr said that V.I. government attorneys told U.S. District Court Judge Thomas K. Moore last month that the new system of assessing commercial property is expected to be in place early next year.
If similar changes were to be made regarding assessment of residential properties, it is not clear whether most property owners would see lower taxes after re-assessment. Many properties may be assessed below actual value, Derr said, but new assessments could increase the assessed value on other homes.

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Oct. 4, 2001 - Several owners of St. Thomas residential property filed a federal class-action lawsuit this week claiming that the V.I. Tax Assessor's Office improperly assessed the value of their properties, resulting in higher property tax bills.
Plaintiffs Robert Schmidt, Kim Holdsworth, Dori Derr and the Robert Schmidt Development Corp., represented by attorney James Derr, said they were filing the lawsuit on behalf of all Virgin Islands taxpayers whose properties may also have been improperly assessed. The plaintiffs own a total of 11 properties in Estates Peterborg and Lovenlund, the suit states.
The legal complaint, filed in U.S. District Court on Monday, is the companion piece to similar lawsuits filed previously by commercial property owners, Derr said Thursday. The complaint raises similar issues about the method in which Tax Assessor Roy Martin has placed values on properties, a method which the lawsuits claim does not conform to Virgin Islands law.
The V.I. Code states that properties must be assessed at their actual value, using standards such as location, quality of land, any income derived from the property, recent sale price of adjacent properties and other factors.
But the lawsuits claim that the tax assessor instead has used the estimated cost to replace properties -- a standard not mentioned in the V.I. Code -- which could lead to higher assessments, and thus higher tax bills. The new suit also says that residential properties have not been re-assessed every two years, as the law requires, but that the Tax Assessor's Office has instead applied across-the-board percentage increases that may not reflect changes in the actual value.
The residential property lawsuit has not yet been served on Martin or other V.I. government officials, as the parties to the lawsuit have been in negotiations about how to resolve the dispute, Derr said.
In a settlement reached in the commercial property suit, an independent assessor was assigned to oversee changes made in the Tax Assessor's Office to ensure that assessments were being done according to both the law and nationally accepted standards.
Under that settlement, all commercial properties are to be re-assessed under the new guidelines, an action that Derr said could lead to lower property-tax bills for all V.I. commercial property owners.
Derr said that V.I. government attorneys told U.S. District Court Judge Thomas K. Moore last month that the new system of assessing commercial property is expected to be in place early next year.
If similar changes were to be made regarding assessment of residential properties, it is not clear whether most property owners would see lower taxes after re-assessment. Many properties may be assessed below actual value, Derr said, but new assessments could increase the assessed value on other homes.