What the Assessors Do
Assessors are required by Massachusetts law to value all real and personal property within their community. They value every property, from single-family residences to the largest of commercial and industrial enterprises. They may perform this work with their own staff or they may hire a professional appraisal firm. Increasingly Assessors use computer software s a tool to maintain values and assist with the multitude of calculations required in their work.
Every three years Assessors must submit these values to the state Department of Revenue for certification. Assessors must also maintain values in the years between certifications. This is done so that each property taxpayer in the community pays his or her fair share of the cost of local government - no more or less - in proportion to the amount of money the property is worth.
Assessors also have a responsibility for the motor vehicle excise tax bills originated by the State Registry of Motor Vehicles. They update the bills to reflect recent changes and then pass them on to the municipal Collector for distribution. Assessors grant abatements and answer any questions regarding excise tax bills.
Assessors then have a major role in promoting effective financial management of their communities. By keeping values at the market standard, the Assessors assist in maximizing resources available to fund municipal services expected by residents. Property taxes are one of the major sources of funding for community services enjoyed by the taxpayers - schools for their children, police and fire protection, and the upkeep of municipal roads, including that special New England priority - snow-plowing.
How Assessors Determine Value
Valuation in Massachusetts is based on "full and fair cash value", 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 taxable properties in their communities. Properties such s 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. Size, type and quality of construction, plumbing, and type of heating system - are examples of the data listed on individual property record cards before the valuation process can begin. Assessors may not have to go inside each property before every revaluation if records are kept up to date and building permits are checked and recorded for changes in individual properties.
Finding the "full and fair cash value" or "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 a buyer is willing to pay depends in part on the return he expects to receive.
The Assessor does not create value. Rather, he has the legal responsibility to discover and reflect changes that are occurring in the marketplace.
What is the Assessment?
The assessed value (or assessment) is the value of the property to be used for taxation, as determined by the Assessors according to Massachusetts law and regulations set by the Commissioner of Revenue.
Why Assessments Go Up When a Property Hasn't Changed
Since assessments must be set at market value, rising real estate values in a community will be reflected in generally higher assessments. All properties, however, do not change in value in exactly the same degree. Many factors influence values and the value of some properties - those with water or mountain views, for example - may well increase more rapidly than others.
Why an Increase In Valuation Does Not Necessarily Bring a Higher Tax Bill
Taxpayers who are informed of an increase in the value of their property are understandably concerned that their tax bills will increase accordingly. In the past - before cities and towns in Massachusetts were regularly revaluing their properties to the market value and before Proposition 2 1/2 limited the amount a community can collect from the property tax - there were often dramatic increases in tax bills when property was reassessed.
For the most part, however, this is no longer true. In fact, as valuations increase, tax rates decrease and thus taxpayers will be paying a lower rate per thousand dollars of valuation. Any increase in the tax bill should be moderate, reflecting the minimal increase in overall property taxation allowed by Proposition 2 1/2 (and any override approved by the voters).
Nevertheless, there are certain circumstances when the increase in value may bring more than a minimal increase in taxpayer's bill.
When the increase in value is the result of an addition to the property (a swimming pool or a new room) or when the value of a particular class of property is rising more than other classes in the same community (beach-front homes, for example), the taxpayer can expect his or her bill to reflect those circumstances.
Taxpayers in a community that approve an override of Proposition 2 1/2 will also expect to see that additional tax reflected in their bills. Otherwise, there should be no dramatic increase as a result of a revised valuation figure.
It can be helpful to think of the property tax collection as the total a community can collect from each taxpayer each year in proportion to the value of his property. Both that total amount an d any annual increase are limited by Proposition 2 1/2.
What if You Disagree with the Assessed Value of Your Property?
If, in your opinion, the assessment of your property is too high, by all means discuss this with the Assessors. You should provide data substantiating why you believe the property to be over-valued.
Abatements and Appeals
The taxpayer has a formal right to file for an abatement of taxes, once the tax bills have been distributed. The taxpayer can file if he or she believes the property is over-assessed, that it is not assessed fairly in comparison to other properties, or that it is not classified correctly by the Assessors. Information about this and the deadlines that must be met in filing an application for abatement is available at the Assessors' Office. Also, please consult the reverse of your tax bill for specifics concerning an appeal.
If the Assessors do not grant the desired abatement, the taxpayer also has the right to appeal to the State's Appellate Tax Board within a certain time period. Information and applications are available from the Appellate Tax Board, 399 Washington Street, 3rd Floor, Boston, MA 02108-5292, tel (617) 727-6234.
By State law, certain taxpayers are allowed exemptions from their property tax bills. These exemptions are allowed to those who are qualified primarily from among the elderly, veterans, the blind, widows and widowers, and the minor children of deceased parents. In order to receive the exemption, however, they must apply at their local Assessors' Office. As long as the applicant meets all the requirements laid out by law, the Assessors must grant the exemption.
What the Assessors Do Not Do
Assessors do not make the laws that affect property owners. Tax laws are enacted by the Massachusetts Legislature. Various guidelines and regulations to implement the legislation are established by the Department of Revenue. The Assessors, in short, follow procedures established by others to set the value of property. Value is actually set by buyers and sellers as they establish the worth of comparable properties through their transactions in the real estate marketplace.
The Assessors also do not determine taxes. The level of property taxation is determined by voters through Town Meeting action. Money appropriated (spent) at Town Meetings is generally raised through local property taxes. Similarly, the Assessors do not decide who is entitled to relief on their property tax bills through exemptions; rather they follow the state law.
How Property Taxes Are Determined
Before Proposition 2 1/2 went into effect in Massachusetts in fiscal year 1982, the amount to be raised by the property tax in each community was essentially determined by what the community decided to spend through it's Annual Town Meeting. In brief, budgets were determined, and then tax rates were set to raise that amount.
With Proposition 2 1/2 in effect, the process is reversed. The tax limitation law sets the maximum amount a community may collect from the property tax; budgets must be made to fit within that limit (or within the increased limits of any overrides adopted by the voters).
The Town Meeting adopts a budget that reflects funds to be raised through the levy and the additional funds from other sources, such as state aid and local receipts from fees and user charges. The amount to be collected from the property tax (called the "levy") is divided among the local taxpayers in proportion to the value of their property.
Determining the Tax Rate
Once the Assessors have calculated the current total valuation of property and know the amount the Town Meeting has voted to come from the levy, the Assessors prepare a document that shows how much of the value and how much of the proposed levy would come from each of the different classes of property (residential, commercial, industrial, personal and open space). They provide these calculations and document to the Selectmen who must then vote on whether to apply the same tax rate or separate tax rates to the different property classes.
If community officials choose to utilize different tax rates, a residential rate, for example, be $18 per thousand and the commercial/industrial rate $24 per thousand. (The tax rate is expressed in dollars per thousand of value. A tax rate of $25 per thousand then would result in a tax of $2,500 for a property valued at $100,000.)
Next, Assessors prepare a "recapitulation sheet" that lists all the different sources of revenue available to the community in the coming year. The Assessors then submit the "recap sheet" to the Department of Revenue and request certification of the tax rate. Once the rate is certified, the tax bills scan be mailed.
Tax rates in Pepperell since 1978.
Who Are Assessors
There are some 1200 Assessors in Massachusetts. Most are elected part-time officials contributing their services to the community. Most often part-time elected boards hire a full-time trained assistant or appraiser.
Once elected or appointed, an Assessor in this state must complete certain courses and pass examinations administered by the Department of Revenue. Most frequently assessing personnel take further studies to stay current.
In the Town of Pepperell, the current elected members of the Board of Assessors are listed above.
The Department of Revenue's Role
Through its Division of Local Services, the unit that has regulatory and assistance responsibilities for municipal finance and taxation, the Department staff certifies both valuations and tax rates for cities and towns.
The Division of Local Services functions through four Bureaus: Accounts, Local Assessment, Municipal Data Management/Technical Assistance and Property Tax.