Valuation in Massachusetts is valuation at “full and fair cash value,” defined as the amount a willing buyer would pay a willing seller on the open market. Assessors must collect, record and analyze a great deal of information about property and market characteristics in order to estimate the fair market value of all properties in their community. Properties such as churches and educational institutions are also valued even though they are exempt from taxation. Assessors first inspect each property to record specific features of the land and building(s) that contribute to its value. Land size, location, view, building size, type and quality of construction, number of rooms, number of baths, number of fireplaces, type of heating system-- all are examples of the data collected on each individual property before the
valuation process can begin.
Finding the “market value” of a property involves discovering what similar properties are selling for, what the property would cost today to replace, and what financial factors, such as interest rates, may be affecting the real estate market. Valuation techniques for commercial and industrial properties also include analysis from an investment point of view, since the purchase price the buyer is willing to pay depends, in part, on the return the buyer expects to receive.
The assessors do not create value. Rather, they have the legal responsibility to discover it and make sure that assessments reflect the changes occurring in the marketplace. People create property value by their transactions in the market. Since assessments must be set at market value, rising real estate values will be reflected in generally higher assessed values. All properties, however, do not change in value to exactly the same degree. Many factors influence value, and the value of some properties may well increase more rapidly than others. The construction of a garage or the addition of a room would increase the market value of the property, and therefore, also increase the assessed value.
In effect, the assessors do what property owners do to determine the selling price when putting a property up for sale, only the assessors must follow specific guidelines.
How to Appeal Your Property Assessment
The assessors’ function is to determine the fair market value of your property as well as of all other properties in town. A revaluation is done, by State Law, every three years in each of the 351 cities and towns in Massachusetts to reflect the fluctuating forces in the real estate market. An increase in your assessment, while it does indicate that your property is increasing in value, doesn’t necessarily mean that your taxes will increase (because taxes are actually determined by the taxpayers voting at annual town meeting and by proposition 2 ½ override questions which may appear on the annual Town Elections ballot). It does show that the value of the equity in your property is growing.
Before you file an application for abatement, there is information you should consider. First, you should separate the issue of taxes from that of assessments. Your taxes are determined by vote of the taxpayers through town meeting and/or ballot questions. The issue you wish to address, rather than the dollar amount of your tax bill, is whether you think the assessed value accurately reflects the market value of the property on the assessment date for the current fiscal year. (The assessment date is the January 1 preceding the fiscal year which begins July 1.)
The data in the assessors’ record is the primary determinant of your value. Accuracy is the first thing you should check because good results can come only from good data. Some property features carry more weight than others do. Building dimensions and features are generally significant, and you should be prepared to discuss them if you feel an error has been made. The level of detail is up to the property owner because the assessors will rely on the records in the office in the absence of other information.
The central issue in an appeal is market value. The key is to identify comparable properties that have actually sold during the period prior to the assessment date, that are similar to yours in terms of size, features and neighborhood. Your appeal is most likely to succeed if it is supported by sound information. Be aware that many property owners spend a lot of time gathering information that has minimal value. The histories of your assessment or comparisons with properties in your neighborhood that haven’t sold are, at best, weak indicators that an assessment is out of line. In an appeal, the burden of proof rests with the taxpayer.
There is only one time during the year to file an application for abatement: It begins when the tax collector mails the third quarter (“actual”) tax bills, and the deadline is the same as the due date of first actual tax bill. Tisbury is on a quarterly tax billing schedule, and the first two bills of the fiscal year are preliminary bills. The tax rate is not determined until the town receives final certification of values from the Massachusetts Department of Revenue at which time the actual tax bills are mailed. The third quarter bill will have the actual assessed value and the new tax rate.
Please submit supporting documentation with your abatement application. You may be asked for further documentation, and you will need to set up a time for an inspection by the Assistant Assessor.
All real estate abatement applications MUST BE FILED within 30 days of the mailing of the actual tax bill