RE Tax Bills Prompt Surge In Complaints
The reality is sinking in for property owners around Central Massachusetts: Current assessed property values used to calculate tax bills are greater than prospective market values.
For many, realizing that their residential or commercial property is being taxed on a assessment that exceeds its current commercial value is cause for anger.
In Worcester, the number of property owners filing for abatements based on their tax valuation exceeding their property’s prospective selling price is cause for anger and action. According to city assessor Bob Allard, 1,700 property owners have filed for abatements this year compared to 900 last year.
About half of them will be successful.
In The Tank
That’s because there’s a good reason for assessed values to be greater than market values. The assessed values out now, those on which property owners pay taxes for fiscal year 2009, were finalized Jan. 1, 2008 and were based on property values determined in 2007.
Since then, a lot has happened, most of it bad.
“Obviously, the real estate market has tanked between January 1, 2008 and now. The market really dried up in the last half of 2008,” said Allard, who noted that the city’s three-deckers took a bigger hit than single-family homes.
But a few years ago as the real estate market reached for new heights, the same two-year time lag between valuations and assessments existed and Allard’s office had the opposite problem.
“When it’s going up, people say we’re under-assessing, it’s perceived to be unfair.” It’s only in a flat market that the ploddingly slow assessed values and twitchy, unpredictable market values actually line up.
“In 1995 and 1996, it looked like we were right on the money,” Allard said. “It’s tough. A declining market is our enemy. Downturns in real estate are not pretty, not for anybody.”
Full Figures
For some, that explanation just isn’t good enough.
Stephen Madaus, an attorney at Mirick O’Connell in Worcester, said his office is currently inundated with inquiries from property owners trying to decide whether they should seek local property tax abatements. The biggest increase has been from the owners of commercial property, Madaus said.
“We’ve received a number of inquiries from a number of owners considering it, but it’s time consuming and the likelihood of success is limited,” he said. That’s because property owners must show that the assessor’s valuation was faulty or improper. “But they’re trained, and it’s not a real-time assessment,” Madaus said. The assessment process is essentially the same as the real estate appraisal process.
State Department of Revenue guidelines require that assessments be “full, fair and based on market value,” said Bob Bliss, a department spokesman. “There’s a lot of mathematical analysis done. It’s not like the old days. It’s a lot more sophisticated.” Many towns hire outside tax assessment companies to do the job for them or to help out.
Jennifer O’Neil, principal assessor in Grafton and vice president of the Worcester County Assessor’s Association, said she expects market values to continue to fall. When property owners get tax bills in 2010, they’ll be based on assessments done this year. “People will be getting tax bills and saying, ‘I can’t sell my property for this,’” O’Neil said. She predicted that the assessed value of property in Grafton will be 15 percent higher than market values by 2010.
The state Department of Revenue requires that towns perform a full visual revaluation every three years and to do adjustments in the two intervening years.
Westborough just went through a full revaluation. Assessor Linda Swadel said her office saw 140 property owners apply for abatements, no more than any other year, which was a little bit of a surprise.
“People are coming in from home watching CNBC, where they’re saying, ‘Your house value is in the tank,’” she said. “I thought we’d have more of an influx.”
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