CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

Barbara's Column
January #3

Filing for property tax abatement
no task for the faint of heart
by Barbara Anderson


The Salem News
Thursday, January 19, 2006

-- Second of two parts --

Last week I told you about my 13-percent property tax increase and my decision to apply for an abatement.

So here I am, with my abatement form in front of me.

Section A.  Name, address, telephone, Social Security number.

Wait! We were promised when the Social Security Act was passed in 1937 that the number would be used only for retirement benefits. So that would be, "N/A".

How'm I doing so far?

Section B,  Property Identification.

Assessed value, 
$419,400, as of January 1, 2005.

Description,  Five-room, two-bath cottage.

Land area, 6 500 square feet.

Class.... Umm, middle? Eventually I realized what they were after it's residential, not commercial.

Section C.  Reason(s) abatement sought? Overvaluation? Disproportionate assessment? Incorrect usage classification? Other.

Applicant's opinion of:  Value $ ____ Class ___ Explanation

Answers: Overvaluation; something less than $419,400; still residential. Explanation of what?

Next page.  More detailed description: Heat type? Remodeling history? Swimming pool? Does lot have any factors which you feel might affect its value?

No swimming pool; but the ledge and dirt basement floods when it rains.

Sale price:  $34,000 in 1975. Would have paid less if we'd seen flood marks, but tenants had vicious German shepherd in basement.

Next page.  Sales market comparable properties:

Time out to get the newspaper. Wait! This must reflect properties sold in 2004. How do I find that? Skipping for now.

Similar properties compared by value:

This I can do. My house was subdivided from a larger lot. Ralph, my ex-husband, co-owns it with me and later bought the rest of the property, which is another cottage with 25,000 square feet of land. My land is assessed at $46 per square foot and his at $27 per square foot. The land belonging to the house across the street, 9,292 square feet in area, is assessed at $37 per square foot. Surely these are inequities?

Ralph's theory is that since all of Marblehead is apparently a valued address, with McMansions popping up in every neighborhood, the land as a whole should be worth the same amount per square foot, with a few exceptions like waterfront property. This fit with what assessor Mike Tumilty told me last week, that assessors "set land value first" because "there isn't enough land in Marblehead to satisfy the demand".

I called him again. After another hour and a half on the phone with him patiently explaining the facts of land values, I am older and wiser, but not wise enough to really understand why, as he says, "the larger the lot, the lower the price per square foot."

He refers to "economy of scale" and compares it to doughnuts, which are cheaper by the dozen. Or shopping at Costco, where you buy cheaper in bulk. So, you buy enough land to put your house on, and the yard is less valued.

Tumilty notes a new development of very large houses, each crammed onto 10,000 square feet on the main route into town. The homes sell for close to a million, but the land is assessed at roughly the same square-foot value as mine.

One property, one house. If my house burned down, its 1,102 square feet could be replaced by a colonial with two full stories. But the potential for a "better" house is not considered by the assessor, except in that he knows what little homes like mine are selling for.

Never mind. I get the bottom line. Could I have sold it, on Jan. 1, 2005, for the assessed value as determined by this year's revaluation?

It depends on who the buyer is. Are you referring to someone like me, who wants a cozy cottage? (But then, how could someone like me afford $419,400?) Or are you talking about a developer, who will replace it with the larger colonial?

How can an assessor know which would have shown up if I'd decided to sell?

Just because I'm lost doesn't mean the truth isn't out there. I feel as I did my senior year of high school, when I had straight As in history but a mental block about the gold standard.

I do know that assessors have no motivation to over-assess anyone, since communities won't get any more money from the higher values. The tax rate, under Proposition 2, will adjust.

Assessors are constitutionally required to assess at market value, and have a difficult job determining a future consumer's subjective decision.

Mike told me I could get comparable 2004 property sales values in his office. I'll let you know how this all works out.

There is one thing I clearly understand though: Whatever a house actually sells for is its market value, no matter how ridiculously high that may seem.

Someone called me recently with a complaint that the taxes on her $2-million-plus home just increased 50 percent. After questioning, I learned that she had bought the house just before the Jan. 1, 2005 date used by assessors to determine values for our new tax bills.

The woman was indignant that she is now assessed for what she paid for the house. Then she mentioned that she wished she'd known about that assessment before she voted for the recent Marblehead override (that caused my tax bill to go up by almost $400).

I told her that, having voted for the override, she deserved to pay every penny of her new tax. And I meant it.


Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem News, Newburyport Times, Gloucester Times, (Lawrence) Eagle-Tribune, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence Journal and other newspapers.