INTRODUCTION
As 2006 draws to a close and the town prepares to send out its actual tax bills for Fiscal Year 2007, several questions may arise from concerned taxpayers that need to be addressed. At this time of year, after the interim valuation adjustments have been made and the anticipation of increased billing, questions center on abatements and filing for relief. In any mass appraisal, errors appear that effect the value whether it is an error in measuring the property, or the inclusion of something that does not exist, or a misstatement of locational or area attributes. Massachusetts General Law allows the taxpayer a vehicle through which they can contest an assessed value on a specific parcel. The following is a description of the abatement process, when to file, and what to do to insure that an abatement is more
likely to be granted.
THE BASICS -VALUATION
Most people feel that it is the change in value that effects their taxes when in fact it is not the case. In actuality, values on homes could double, triple or quadruple and, if the overall budget for the community stayed the same, the individual taxes on each property would stay the same. It is the town’s need to raise money to provide services to the taxpayers that establishes the burden on the entire town, and the estimated market value on the individual homes that allocates that burden to the individual taxpayer.
The assessed value of a property rests strongly on two principles, that of market value and equitability.
Market value is defined as the value that a property would most likely bring in an open market, with proper exposure, a buyer and seller who are knowledgeable and operating in their own best interest, and with considerations made that are terms of cash or its equivalent. Market value is estimated by three approaches to value: sales comparison, cost and income. The sales comparison approach relies on the sales of similar properties and relates best to the valuation of residential homes and single unit commercial properties that would normally be owner occupied. The income approach relies on the conversion of market rent to an indication of value. This approach to value works best on multi-tenanted commercial and residential buildings such as 6+ unit apartment buildings and larger office and retail
buildings. The cost approach relies on the anticipated cost to build, less allocations for physical depreciation, functional obsolescence and economic obsolescence. It is most accurate when the improvements to the parcel being valued are new.
Equitability is also a strong component of municipal valuation or assessing. In order to be taxed fairly, homes must be valued in a similar fashion. For example, it would be inappropriate for a town to value an 8-room colonial on a half-acre of land at $350,000 and value a similar colonial next door for $550,000. Such disparities fly in the face of reason and tend to make taxpayers extremely upset!
WHY SHOULD A TAXPAYER FILE?
A taxpayer should file for an abatement only if he or she has a reason to file. Good reasons are: inaccurately measured improvements; additions that do not exist; amenities, such as pools and sheds, that have been removed or were never built; a lack of equitability in valuation. Bad reasons (or unacceptable reasons) for filing: not being pleased with the value estimate, being unhappy that the values have increased, displeasure with the tax rate, an inability to afford paying taxes.
INVESTIGATION IS AN IMPORTANT FIRST STEP!
If a person feels that he is being unfairly valued, he should investigate to see if there is some reason for his concern. Look at the assessed values of similar homes in the area. Comparability is extremely important if a lot is improved, such as, with a cape; for instance, the values of other similar capes in the area should be investigated. Values of ranches would be inappropriate when valuing a cape because it is impossible to know how the value of a ranch relates to the value of a cape.
Ask for a copy of your property record card and check the data on the card. If disparities exist, contact the assessing administrator and set up an appointment to have the property viewed. There are approximately 8,000 parcels in town. Each property record card has over 100 fields where data is either entered or repeated. As careful as researchers and data entry people are, mistakes are made that effect value. It is up to the taxpayer to check the accuracy of this information and file for an abatement if it is appropriate. It should be noted that not all fields effect value and that if an error is found, the accuracy of the entire card will need to be rechecked by a member of the assessor’s office.
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