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CLT UPDATE
Wednesday, January 30, 2013
Deadline to file property tax assessment appeal:
Friday, February 1
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Bob Ford’s three-bedroom Brockton home was built
more than 40 years ago. By today’s standards, the modest raised
ranch may be considered a starter house.
In recent years, as stocks tumbled and the
housing bubble burst, the property’s value plummeted, from a high of
$308,900 in fiscal 2007, when assessments reflected the hot real
estate market of 2005, to just $188,300 this fiscal year, a drop of
39 percent. Ford’s annual property tax bill, on the other hand,
increased 9.6 percent during the same six-year period, to $3,178
this year, up from $2,900.
“Our tax bills just keep going up, and yet the
city claims it’s broke,” said Ford, 69. “Where is all of our money
going? No one knows.”
Homeowners throughout Greater Boston’s suburbs
are echoing Ford’s frustration. Over the past six years, a period
marred by the recession that began in December 2007, the value of
most residents’ biggest asset, their home, has diminished. Still,
their property tax bills continue to rise, even as Governor Deval
Patrick proposes an increase in the state income tax rate.
The Boston Globe —
North edition
Sunday, January 27, 2013
Getting hit both ways
1. What is the timeframe upon which
assessments are based?
For 2013, assessments are based upon values
as of January 2012, using sales data for calendar year 2011.
Sales that took place in calendar year 2012 will be the basis
for the assessment for FY 2014.
2. Can I appeal my assessment?
Yes, provided the appeal is based upon data
for 2011, not 2012. More information and directions for filing
an application are available at [town's website] under
“Departments – Assessors.”
3. What is the process for appealing my
assessment?
An appeal for abatement can be made after
receipt of the third-quarter tax bill mailed in December and no
later than Feb. 1. The appeal, which must be based upon
valuation during the relevant period (i.e., 2011 calendar-year
sales for the current assessment), must specify the reason for
the complaint. A current appraisal is not relevant. The
assessor’s office will analyze the property and the information
provided. If the data is incorrect or there is evidence provided
that the valuation is wrong, the assessor’s office will change
the valuation. . . .
The Marblehead Reporter
January 7, 2013
Twenty questions with Marblehead’s assessor
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Chip Ford's CLT
Commentary
Friday is the deadline for filing appeals on your
property tax assessment.
If you feel you are being over-assessed, I
strongly recommend that you look into and consider filing an
appeal for a re-assessment and abatement by Friday.
I did last year, before February 1, 2012 deadline
— and this year's assessment on my new
house/property was reduced by 24 percent, an abatement of
$1,187 for this year.
My story is not a usual one, so don't expect such
a dramatic change.
But it's definitely worth looking into
— considering, maybe taking a shot at
it while you still can.
I'd been renting the house for fifteen years when
the landlord decided to sell it. I tried to buy it, applied for a
first-time mortgage but, with my income and assets, was turned down.
It was on the market for over two years, with a steady stream of
prospective buyers traipsing through my domicile at will —
very annoying. But it was his property, not mine, so the parade
of strangers wandering around in my home continued month after month.
Over those two years his asking price continued
to drop, as did interest rates. When he'd dropped his price by
26% it appeared to me that it was close to being sold, so I looked
into a mortgage again. I still didn't qualify, so found a good
friend who agreed to invest in the property, take out a second
mortgage if I could get the first. I was close, but not quite there.
I finally was able to get the landlord to come down a bit more, and
we closed on November 30, 2011.
When I got home from the closing, my next door
neighbor, Barbara, congratulated me on being a first-time homeowner.
"No," I reminded her, "I won't be a homeowner for thirty years,
and will probably be dead before then. I'm now the proud owner of my first mortgage!"
The very next thing I did was head for the town
assessor's office, got some information and picked up the form to
appeal the assessment.
I couldn't file my appeal until January 1st. In
the meantime I filled out the form, put together some documentation
showing its sale price and the 30% drop in fair market value, then delivered the
package to the assessor's office on its first day of business last
year, January 3rd.
A month or so later the assessor's office sent someone
out to physically inspect the property, walk through the house and
around the yard. A short while later I received my abatement. That
was the easiest $1,187/year I've ever made, all for a of bit
initiative and effort.
The town assessor told me that the sale price,
though a consideration, was not the determining factor
for the abatement; the abatement was based on the physical
inspection done of the property.
I asked him, if the previous owner had applied
for an abatement years ago — before he
dropped his asking price by 30%
(his initial asking price was the same as the town’s assessed value
back then) — would he too have
received an abatement at that time?
"Yes, if we'd come out and physically inspected
the property," the assessor replied.
So Jim, my landlord, was allegedly paying more
property tax on this property than he should have been for
many years!
He just never bothered to look into or
challenge it.
Think about it . . .
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Chip Ford |
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The Boston Globe —
North edition
Sunday, January 27, 2013
Getting hit both ways
By Brenda J. Buote | Globe Correspondent
Bob Ford’s three-bedroom Brockton home was built more than 40 years
ago. By today’s standards, the modest raised ranch may be considered
a starter house.
In recent years, as stocks tumbled and the housing bubble burst, the
property’s value plummeted, from a high of $308,900 in fiscal 2007,
when assessments reflected the hot real estate market of 2005, to
just $188,300 this fiscal year, a drop of 39 percent. Ford’s annual
property tax bill, on the other hand, increased 9.6 percent during
the same six-year period, to $3,178 this year, up from $2,900.
“Our tax bills just keep going up, and yet the city claims it’s
broke,” said Ford, 69. “Where is all of our money going? No one
knows.”
Homeowners throughout Greater Boston’s suburbs are echoing Ford’s
frustration. Over the past six years, a period marred by the
recession that began in December 2007, the value of most residents’
biggest asset, their home, has diminished. Still, their property tax
bills continue to rise, even as Governor Deval Patrick proposes an
increase in the state income tax rate.
A Globe review of state Department of Revenue data found that
between fiscal 2007 and 2013, average assessed values of
single-family houses dropped in more than 90 percent of the area’s
communities, even as property taxes spiraled upward. Proposition 2½,
the state law that limits increases in property taxes, allows for
the annual bills to go up even when values weaken.
North of Boston, homeowners in Lawrence — where the average tax bill
grew 18.6 percent, to $2,530, over the six-year period— suffered the
sharpest decline in property values, a 27.4 percent drop to an
average of $167,771.
In Boston’s western suburbs, the biggest loser was Hudson, where
assessments fell 24.3 percent, to an average of $286,966, and the
average tax bill ballooned 30.3 percent, to $4,700.
Only six Greater Boston communities — Arlington, Cohasset, Needham,
Winchester, Weston, and Wellesley — showed an increase in average
value, with most posting modest gains ranging from 2 to 4 percent.
“Your assessed value can go down, but because the levy goes up 2.5
percent every year, your tax bill is going to go up,” said Carolyn
C. Ryan, a policy analyst for the Massachusetts Taxpayers
Foundation, an independent watchdog group. Any tax revenue
attributable to new growth can also be factored into the annual
rate.
The average assessed value for a house in Boston’s suburbs this
fiscal year is $424,094, down 12.8 percent from fiscal 2007.
Meanwhile, the average property tax bill is $6,239, up from $5,088,
an increase of 22.6 percent.
In 81 of the 158 communities covered by the Globe’s survey, values
dropped by more than 14 percent during the six-year period. The
southern suburbs were the hardest hit; of the 10 communities that
suffered the biggest decrease in value, eight lie south of Boston.
Brockton led the list with a 36.7 percent drop. The assessed value
of Ford’s home is slightly above the $184,364 city average.
Needham — where the average assessment climbed 9.2 percent, to
$744,764 — led all suburban communities in bucking the market trend.
The reason: Many people want to settle in Needham, but there are few
lots available. Buyers are snapping up older houses and razing them
to make way for minimansions. On average, there are 75 to 100 new
houses built in Needham each year, almost all of them tear-down
replacements, according to Chip Davis, the town’s administrative
assessor.
“Needham has four commuter rail stops and easy access to the Mass.
Pike and Route 128,” said Davis. “It’s a very desirable, very stable
market. We’ve continued to grow throughout the crash. It’s been high
and very consistent over the past three or four years,’’ generating
$1.5 million to $1.8 million in new tax revenue each year, he said.
Needham’s average single-family tax bill is $8,416 in fiscal 2013,
which runs through June 30. Overall, 13 area communities have
average bills above $10,000. All but one, Manchester-by-the-Sea
($10,522), are in the western suburbs, led by Weston, where the
average bill is $16,921. In all 13 communities, the average tax bill
rose by at least 10 percent between fiscal 2007 and 2013.
Statewide, the average property tax rate increase has remained
steady over the past three fiscal years, between 3 and 4 percent,
according to a recent report by the Massachusetts Taxpayers
Foundation. The relatively small growth reflects sluggishness in new
construction, tougher mortgage qualification, and voter reluctance
to approve higher taxes through Proposition 2½ overrides.
Last fiscal year, Massachusetts voters approved just $15 million in
tax increases, the foundation reported.
Homeowners in Essex, where voters approved four overrides between
July 2000 and May 2005, have shouldered the highest property tax
increase, 43.8 percent, bringing the tax bill for the average
singlefamily house to $7,474 this fiscal year, up from $5,198 in
fiscal 2007.
Across the suburbs, the tax bills for some homeowners rose
proportionately more than others, depending on the assessed values
of their homes.
In some communities, those hardest hit were homeowners on the lower
end of the market, including those in starter homes and
condominiums, according to an informal survey of area assessors.
In Georgetown, prices for higher-end houses dropped significantly
between 2007 and 2008, while assessments for more modest properties
declined less dramatically.
“We saw a 10 to 15 percent reduction in value, with higher-end homes
dropping considerably more than that,” said Georgetown assessor Jay
M. Ferreira. “The market today is reminiscent of ’93, ’94, the last
time we saw a big adjustment in values. Things are getting back to
normal, more stable.”
The data reviewed does not include information from nine communities
— Brookline, Chelsea, Everett, Malden, Marlborough, Plainville,
Somerville, Waltham, and Watertown — that gave a tax break to
homeowners who live in their properties in either fiscal 2007 or
2013, or both. As a result, the data from those communities do not
match the information collected from other cities and towns.
Communities across the state typically issue their official tax
rates in December, halfway through the fiscal year, so the first two
quarterly bills are estimated. The new rates are reflected in the
third quarter bill, usually mailed out around the holidays.
That is when phone calls to the assessor’s office increase, as
homeowners try to figure out how the new payment amount was
calculated.
Most homeowners know their home’s assessed value is based on the
sale prices of comparable properties in the area, but they often are
unaware that local officials are required to use sales from the
previous calendar year to determine a property’s worth. This fiscal
year’s assessments reflect where market values stood on Jan. 1,
2012.
Most of the time, a quick explanation is all that is needed to calm
a disgruntled homeowner. But sometimes irate taxpayers are not
easily assuaged, local officials say.
In Brockton, fed up residents are storming City Hall — more than 200
people showed up at a City Council meeting last month — to protest
an increase in the tax rate, and to demand more transparency in
local government.
A group of concerned citizens formed Brocktonians for Limited
Taxation.
“We can’t let things continue to deteriorate,” said Ford, an active
member of the organization.
“We need to change the way City Hall functions,’’ he said. “The only
way to do that is to put some new faces on the City Council and in
the mayor’s office.”
The Marblehead Reporter
January 7, 2013
Twenty questions with Marblehead’s assessor
By Andrew Oliver/Special to the Reporter
Marblehead — The FY 2013 tax rate in Marblehead has been set at
$10.85, up from $10.52 in FY 2012. The median single-family
assessment declined 2.4 percent to $476,000, and the median
single-family tax bill increased 0.6 percent, or $31, to $5,165. The
commercial rate has once again been set at the same rate as the
residential rate.
Marblehead’s 2013 tax rate will be the third lowest of the 17 North
Shore cities and towns and also the third lowest of 34 Essex County
communities.
Real-estate assessments for Fiscal Year 2013 have just been mailed.
Assistant Assessor Mike Tumulty answered questions about the
process.
1. What is the timeframe upon which assessments are based?
For 2013, assessments are based upon values as of January 2012,
using sales data for calendar year 2011. Sales that took place in
calendar year 2012 will be the basis for the assessment for FY 2014.
2. Can I appeal my assessment?
Yes, provided the appeal is based upon data for 2011, not 2012. More
information and directions for filing an application are available
at marblehead.org under “Departments – Assessors.”
3. What is the process for appealing my
assessment?
An appeal for abatement can be made after receipt of the
third-quarter tax bill mailed in December and no later than Feb. 1.
The appeal, which must be based upon valuation during the relevant
period (i.e., 2011 calendar-year sales for the current assessment),
must specify the reason for the complaint. A current appraisal is
not relevant. The assessor’s office will analyze the property and
the information provided. If the data is incorrect or there is
evidence provided that the valuation is wrong, the assessor’s office
will change the valuation.
4. Does the assessment process include all transactions that
occur?
The process includes all arms-length transactions. Excluded are
non-arms-length transactions, such as those involving foreclosure,
bankruptcy, divorce and the purchase and sale following remodeling.
5. What is the authority under which assessments are made?
Chapter 59 of the Massachusetts General Laws. The process is
overseen by the Department of Revenue.
6. How does Prop 2½ affect assessments?
The tax levy on all property in Marblehead in aggregate (not on
individual properties) can be increased by no more than 2.5 percent
per annum. To this total is added the tax on new growth (such as new
construction, condo conversions, any improvements/parcels taxed for
first time) and any overrides or debt exclusions, to calculate the
new tax levy.
7. What are the measurements used in the assessment process?
An assessment-sales ratio (ASR) is calculated for each property sold
by dividing the current assessed valuation by the sales price. A
property assessed at $100,000 that sold for $100,000 would have an
ASR of 100 percent. If that property sold for $110,000, the ASR
would be 91 percent. If the property sold for $90,000, the ASR would
be 111 percent.
Remember that the assessment is based upon data from earlier years,
not the current year. A property that sold in January 2013, for
example, would be assessed based upon data for the year 2011. If the
market had risen in the last two years, it would be reasonable to
expect that the current market price would be higher than that on
which the assessment was based. Thus in a rising market, the median
ASR is likely to be less than 100 percent. Conversely, in a falling
market, the median ASR is likely to be above 100 percent.
A second factor is the “coefficient of dispersion,” which reflects
the average absolute deviation from the median.
8. What are the state requirements for assessment values?
The ASR for residential property must be in a range of 90-100
percent, and the COD must be no more than 10 percent. The ASR must
be consistent throughout town for all types of property.
9. What are Marblehead’s goals?
An ASR of 95 percent. With a COD of 10 percent, that means that the
range of ASRs should be 90-100 percent. Bear in mind that these are
the values at the time the assessments are made. The actual ASRs at
the time of sale will vary depending upon market conditions.
10. How did Marblehead do last year?
For single-family homes, the ASR was 96 percent and COD less than 5
percent.
For condos, the ASR was 97 percent and the COD 3.5 percent.
Remember that these numbers apply to the entire stock of housing and
are medians, but the results speak to the overall accuracy of
assessments.
11. What percentage of properties sells each year? Is there a
minimum requirement for assessment purposes?
In 2012, there were 229 sales of single-family homes, or 3.7 percent
of the stock of 6,178, and 42 sales of condos, representing 4.3
percent of the stock of 966 units. While it is hard to get an
accurate read on national statistics, it is certainly true that we
stay in our houses longer than do people elsewhere. No surprise
there: Marblehead is not only a great place to live, but it is also
extremely well run, as demonstrated by our tax rate.
The assessment-process requirement is 2 percent for each property
class, or a minimum of 20 units.
12. What happens if there are fewer than 20 units sold?
That happens in Marblehead in categories such as multi-families, in
which case data for 24 months is used. The period is July 2010 to
June 2012.
13. How big is Marblehead?
Four-point-two square miles with 14 miles of coastline and 30
residential neighborhoods.
14. What happens when property changes hands — what does the
assessor’s office do?
The assessor’s office receives data on all sales and sends out a
questionnaire (which is completed by 80 percent of buyers) to the
new owner. This data provides background information and is taken
into account for subsequent assessments.
15. Do assessments automatically increase when improvements are
made?
The assessor’s office receives copies of all building permits and
visits every site for which a permit is pulled. The assessor’s
office determines the progress of work as of July 1, regardless of
the status at the building department.
16. Which improvements have the greatest/least impact on assessed
values?
The greatest: new construction, additions, bathroom and kitchens.
The least: those that minimize deferred maintenance:
siding/roofing/windows — items that are expected and integral to
functionality and habitation.
17. How does Marblehead tax commercial property?
Each year, the assessor’s office presents to the Board of Selectmen
a schedule showing the impact of implementing a commercial rate that
is allowed, by law, to be up to 50 percent higher than the
residential rate. In Marblehead, 95 percent of property is
residential, so the imposition of a separate, higher commercial rate
would have a disproportionate impact on commercial taxes. Indeed, if
the commercial rate were increased by the maximum 50 percent, the
reduction in the tax paid by the median homeowner would be just $148
per annum, while the increase on a similarly assessed commercial
property would be $2,580.
18. Are there exemptions available?
Statutory exemptions, for which the town is reimbursed by the state,
are available for eligible taxpayers and include exemptions for the
elderly, veterans, the blind and widows. More information on
exemptions is available from the assessor’s office, 781-631-0236, or
e-mail, assessors@marblehead.org. Please call for more details.
19. How does the senior work-off program work?
Opportunities for duties such as filing, phone coverage and light
clerical work are available for senior citizens through the Senior
Work-off Program. Seniors over 60 who meet certain income guidelines
can earn a rebate on their taxes of up to $750. Applications for
this program go through the Council on Aging office on Humphrey
Street, 781-631-6737.
20. How does Marblehead’s tax rate compare with other towns and
cities?
Marblehead’s rate of $10.85 is the third lowest of 17 North Shore
communities and also the third lowest of the 34 cities and towns in
Essex County. Swampscott’s rate is $18.84 (and its commercial rate
$35.02).
What is the outlook for 2014 assessments and tax rates?
The 2014 assessments will be based upon 2012 sales. [The year] 2012
saw an increase in sales in the lower price ranges, producing a
slight decline in the overall median price. My best guess is that
the tax rate will not change very much in 2014. In any year,
however, some assessments rise, some fall, and some remain
unchanged. Approximately 70 percent of Marblehead’s revenue comes
from property taxes.
Andrew Oliver lives in Marblehead and writes regularly on real
estate related matters at OliverReports.com and wickedlocal.com/marblehead/blogs/oliverreports.
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NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
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