From The Assessor’s Office | Massachusetts Real Estate Tax Assessments and Abatement Basics
Along with the celebration of the holidays comes the moment of truth when communities with quarterly tax billing send out the new Fiscal Year’s tax bills. Often there is an emotional response of frustration and anger. However, take a deep breath before contacting the Assessor’s office and ask yourself two questions: “Is it my assessment that’s too high or are my taxes simply too high? Could I sell my house for the assessed value?” If your assessment seems reasonable, but you think your taxes are too high, my recommendation is to go vote at Town Meeting or contact your City Councilmen, and get involved in your local government. Don’t contact your Assessor. If your assessment is too high, it’s worth considering filing for an abatement.
There are a few things to know before picking up the phone to call the Assessor’s Office.
Most importantly, applications for abatement must be postmarked by February 1st . After that deadline, the Board of Assessors has no authority to grant abatements for the Fiscal Year.
How are real estate taxes calculated and what do these bills represent?
The Fiscal Year begins on July 1st and runs until June 30th. The first two tax bills received on July 1st and October 1st are preliminary tax bills based upon the prior year’s values and tax rate. The new Fiscal Year’s assessments are set in the fall, the community determines if there will be a split or single rate and a tax rate set by mid-December. The tax bills sent by January 1st represent the Actual bills for the Fiscal year. These bills use the new Fiscal Year’s assessment and tax rate to determine the total year’s taxes due. The preliminary amounts are subtracted. The remaining amount is divided by two for the third and fourth quarters. This calculation results in the four quarters not being the same.
Ex. Fiscal 2017 assessment of $ 450,000 and rate of $ 17.80/$ 1000
Fiscal 2018 Preliminary bills $ 450,000 x $ 17.80/$ 1000= $ 8,010 /4 quarters = $ 2,002.50
Fiscal 2018 Q1 = $ 2,002.50 : Q2= $ 2,002.50 Total Preliminary Paid = $ 4,005.00
Fiscal 2018 Value set at $ 465,000 and rate $ 18.25
Fiscal 2018 taxes: $ 465,000 x 18.00/$ 1000 = $ 8,370.00
Less Preliminary Bills: $ 8,370.00 – $ 4,005.00 = $ 4,365.00
Fiscal 2018 Q3 & Q4 Bills: $ 4,365.00/2 = $ 2,182.50
The total increase in taxes is $ 360.00
Many take the recent tax bill just received, multiply by four. In the example above, that would represent an increase of $ 720.00. You can take some consolation in that the next July’s bill should be less than the bills just received.
Assessed values for Fiscal 2018 are as of January 1st, 2017. They are based upon the calendar 2016 sales of similar properties. The property that sold in your neighborhood last month is not considered in the current assessments. Unlike a “Fee Appraisal” for a mortgage, Assessor’s utilize “Mass Appraisal”. Assessors analyze an entire year’s sales, looking at assessment to sales ratios and different property characteristics. The analysis compares similar properties comparing factors such as size, location, style, age, quality and condition. Utilizing a CAMA (Computer Assisted Mass Appraisal) system, they apply this analysis equitably across all the properties in Town. The effectiveness of this relies on accurate data to evaluate that people paid X for Y.
A word of caution, before proceeding. When filing for an abatement, assessments can go up if errors are found that need to be corrected.
Procedures for Filing an Abatement
The first step is to get a copy of your property record card and review the information for accuracy. Look at the measurements and details such as acreage, bath count, fireplaces, finished basement, central air, etc. Next, review the grade rating, quality and condition of the dwelling compared to other similar properties. It is key to look only at similar properties. Don’t compare your newer colonial to a 1950’s cape. Inequitable valuation is a difficult case to support since the same valuation model is applied to all properties. If there are differences in value between you and your neighbor, it will be the result of differences in data. Correct or incorrect.
- Don’t cherry pick sales and properties throwing out anything that doesn’t support your argument. Assessor’s won’t overlook these. If other properties need correction, it doesn’t make your property value wrong.
- Don’t compare your newer colonial to a 1950’s cape. Even if the property is next door, similar properties need to be compared. If you find data errors, filing for an abatement may be worth your time.
- Don’t simply divide the assessment by the living area and compare $ /square foot. This is not an accurate comparison. Factors are not linear. This calculation does not take into account differences in acreage and interior details.
- Don’t bring a Zillow value into the Assessor’s office as support. Zillow can be a decent tool for lists of sales, but it falls short when it comes to analysis. Any information provided from online sources should be evaluated independently rather than relying on their values. There are simply too many variables that impact value that can’t be captured by these sites. Information about comparable sales can also be found through brokers or in the Assessor’s office.
- Don’t bring in a bank appraisal that was done on your property within the last six months. It will use comparables that are after the January 1, 2017 effective date of the assessment.
- Don’t refuse an inspection.
- Fill out the application completely and submit it prior to the deadline.
- Clearly explain any issues with the data on the record card.
- Select and present comparable sales that are prior to the January 1, 2017 effective date of this assessment.
- Select comparable sales that are actually comparable. They should be similar location, age, style, size etc.
- Provide a reasonable opinion of value that is supported by your explanation.
- Make yourself available for an inspection within the schedule of the Assessor’s. While you are never required to allow Assessor’s into your property, denying an inspection when applying for an abatement can almost guarantee a denial regardless of the reason for application. Don’t delay the inspection. Bear in mind, that this is something you have applied for so do your best to be accommodating for the Assessor’s inspection schedule.
After the Board of Assessors has acted on your application and you’ve received notice, if still unhappy with the outcome, the next step is an appeal to the Appellate Tax Board.
In closing, remember the February 1st filing deadline, assessments can go up if other errors are found(review your record card carefully), and go back and review the “Don’ts” above before sending in your application.
Jonathan Steinberg, MAA, MACR, is the Chief Assessor, Town of Westborough