Friday, October 10, 2003
Rising land prices drive up assessments 24%
"How can a house I paid $200,000 for be worth so much?"
"Why is my assessment up more than my neighbor's?"
"How will this increase affect my taxes?"
"What if I don't think my assessment is fair?"
These are some of the questions Principal Assessor John Speidel and Board of Assessors Chair Jim Marchant hear nearly every day. "The state Department of Revenue (DOR) mandates that the Board of Assessors provide a full and fair valuation for the town," says Marchant. A revaluation of all property in Carlisle was completed in September to fullfill that requirement. As selling prices for homes and land have risen, so has the assessed value of real estate held within the town.
On average, the revaluation this year increased assessments 24%. Individual holdings saw a range of increases (or in some cases, decreases) depending on how much land was involved, where the property was located, and how recently it was last assessed.
Two acres for $569K
What has driven up assessments in Carlisle most is the rapidly increasing price of land. Two-acre buildable lots in Carlisle are now selling for as much as $569,000. "It boggles the mind," says Speidel. Adds Marchant, "We may think that's a lot of money, but if someone pays it, we have to accept it [as the market value for purposes of assessment]."
In older neighborhoods, Speidel used an average land value of $375K per lot, an increase over the $230K previously used. "Only two homes under $500K sold in Carlisle last year," says Speidel, noting that it would be hard to defend a lower land value. Adds Marchant, "If buyers are willing to purchase teardowns for $450,000, that tells you the land is worth at least the cost of acquisition plus demolition."
Speidel valued "excess land" at $5,000 per acre. Excess land is the acreage above that required to build. Other towns use values as high as $100,000, but Speidel takes the position that excess acreage is generally pretty valueless. "It's probably wet or someone would have done something with it."
Revaluations are not done at the whim of the Board of Assessors. "There are rules and every town has to play by those rules," says Marchant. The state requires a reassessment at least every three years, supported by data on the previous year's sales within the community. The DOR reviews assessment plans and can refuse certification if assessed values diverge more than 10% from market values.
Assessment up, tax rate down
"People think the town raises more money by raising assessments, but that's not true," says Marchant, noting the total tax burden, decided by Town Meeting, remains constant. Rising assessments allow for a lower tax rate; as a result, the tax rate, which last year was $15.05 per $100,000 of assessed value, is expected to go down about $2.50. On average, homeowners will see no change in their taxes (beyond increases in the budget approved at Town Meeting) in spite of higher assessments.
Speidel asks homeowners, "If you have any questions, call us [at 1-978-369-0392]." For those who haven't yet checked, there is a book in the Assessor's office at Town Hall that lists each property's old and new assessments and the percent change. If you believe your assessment is unfair, you will be advised of the procedure for challenging it.
The purpose of a revaluation is fairness. Keeping assessments up-to-date ensures that the tax burden is distributed proportionally according to the true value of property. Homes that have not been sold and assessed for many years are often undervalued until they are discovered in a town-wide assessment. "That's why the lowest value properties seem to go up the most," says Marchant.
To assure fairness, Speidel checked each house in Carlisle against the "field card" containing data on lot size and building composition, size and condition. About 5% of the cards were discovered to be significantly incorrect.
In the future, the Board of Assessors hopes to make yearly adjustments to avoid large increases and decreases. "This is particularly important if values decline," says Marchant, noting that on a three-year cycle "there could be a two-year lag before prices are adjusted."
Carlisle hopes to avoid the problems of Concord, which now faces over 100 lawsuits as a result of its recent reassessment. Marchant, whose job as president of Minuteman Appraisals puts him in touch with area homeowners, says people in Concord "were incensed and insulted" by an unresponsive process. "A lot of people in older homes think it's not fair because [their value] goes up so much more [than newer homes]," adds Marchant. "Those people don't consider they were probably paying less than they should have been" in the years before the revaluation.
There is an option of pursuing a case in front of the Appellate Tax Board (ATB) if a solution can't be negotiated locally. "Usually we have only two or three cases a year, but this is rising," says Marchant, noting that as values increase the town can probably expect more challenges. Carlisle is currently involved in eight ATB cases from last year's adjustments. Says Speidel, "By educating the public and keeping communication open we hope to avoid a problem like Concord's."
© 2003 The