A high-priced real estate market coupled with changes in the way property assessments are calculated has fueled a sharp rise in the value of waterview and waterfront property in Edgartown this year.

Although the tax rate will not be set for several months, the Edgartown board of assessors is forecasting a hefty increase in property taxes for waterview property owners, many of whom will see their assessments double.

For fiscal year 2005 the total real property value in Edgartown increased by 24 per cent, to $5.32 billion from $4.29 billion in fiscal year 2004.

"This is the first time in years that values have increased so significantly on waterfront property. People inland likely will see their taxes go down, while people with water views will see them go up," Edgartown principal assessor Will Pfluger said this week.

The announcement comes after a thorough residential revaluation conducted by Vision Appraisal Technology Inc. of Northboro. The revaluation is a complicated process aimed at bringing the value of all properties within a town up to date and in line with the market to fairly distribute the tax burden.

This year marks the first time that Edgartown has hired an outside consultant to do the job. Mr. Pfluger said they wanted a third party to confirm the accuracy of the property assessments before the numbers went to the state for certification.

By law, towns across the commonwealth must have their valuations recertified by the state Department of Revenue every three years. To earn the state's approval, each town must show it has maintained the integrity of its property data, analyzed the sales market and adjusted values accordingly.

Every Island town except Chilmark is seeking recertification this year.

"In 2001 we saw a lot of multi-million-dollar sales on Chappaquiddick, but we were still fairly conservative [in assessing property] because we weren't sure we were seeing a trend yet," Mr. Pfluger said.

"But as time went on, enough sales were up there that we felt we really needed someone outside to take a fresh, careful look at the valuations," he said.

The assessed values for fiscal year 2005 are based on sales that took place in the 2003 calendar year.

Mr. Pfluger cited 13 examples of waterfront, water view and pondfront properties that sold for more than $1 million in 2003, three of which topped $7 million.

The asking price for a number of homes currently on the market bears out the trend, with at least four waterfront properties for sale for between $6.8 million and $9.3 million.

The sharp climb in assessments also comes as the result of changes in the methodology used for calculating a property's value, most significantly in the valuation of open space lots.

Property value is determined by a rigorous and complex process of data collection and market analysis. Among the factors considered are a property's location, acreage, topography, utilities and zoning restrictions.

But the Edgartown assessors historically also followed an informal policy of giving discounted valuations on parcels of vacant land when the land abutted a home site lot owned by the same person.

A person who owns two adjacent three-acre lots, for example, would be assessed at only 25 per cent of market value for the vacant lot.

"It was a way of encouraging open space preservation," said Mr. Pfluger.

About 150 vacant lots were being assessed at the discounted rate, he said.

Vision Appraisal called attention to the rule, saying it was inequitable. The Department of Revenue also told the board of assessors that Edgartown's property tax structure would not be recertified if the policy was continued.

Vision Appraisal also found a number of discrepancies that over the years resulted in properties being under-assessed. Many properties on North Neck on Chappaquiddick, for example, were not properly considered as waterfront property.

In addition, Vision Appraisal incorporated a number of new factors into their calculations by dividing Edgartown into 25 different neighborhoods. The town assessors previously identified only nine areas for valuation purposes.

The Edgartown assessors also previously considered the amount of waterfront footage - as well as total acreage - when assessing value. But Vision Appraisal eliminated the so-called front-foot factor, saying that waterfront property commands the same price regardless.

Mr. Pfluger pointed out that the rise in waterfront values in combination with the elimination of the contiguous land discount will deal some property owners a double blow. He cited one Chappaquiddick property that will see a hike in valuation from $5 million to $16 million.

"Hopefully people will understand why a property on North and South Water streets is increasing in value. How can you argue it? The sales prove it," Mr. Pfluger said.

"But people are not going to be happy about the contiguous land issue. For some, it was the only reason they could hold onto a piece of property rather than sell it."