Friday, January 29, 2010
Understanding your tax bill
Many Carlisle property owners who received a tax bill this month saw a change to their assessment, most likely in the negative direction. But why doesn’t a lower assessment mean a lower tax bill?
There are two factors affecting your tax bill. One is the assessed value of your property. The other is the amount of spending appropriations approved at Town Meeting. The total appropriation is divided by the total value of taxable property in Carlisle to determine a tax rate per $1,000 of real estate property.
Assessments provide a means of fairly spreading the pain of raising enough town revenue to cover appropriations. When all assessments are on the downswing, unless the town cuts spending, the tax rate will have to rise so the same revenue can be raised on lower value.
Town updates assessed values
Property revaluations are required at least every three years, and your 2010 bill will reflect a recent one. Revaluations are based on sales prices of similar properties in the most current completed year. For 2010 tax bills, the sales forming the basis of valuation must have occurred from January to December 2008.
Land, neighborhood, age, condition all factors
Department of Revenue (DOR) regulations require that an in-depth analysis of the factors affecting sales prices be undertaken. Carlisle hires a consultant to do this work, and about 20 factors are looked at, including age, style of home, condition, among others. Land is valued separately from the value of the house. Because each property has different factors and land/house ratios, valuation changes are not consistent town-wide.
This year’s revaluation included an analysis and re-weighting of the codes assigned to neighborhoods. One of about eight to ten codes characterize each Carlisle neighborhood and help determine the value of land and housing. If mini-mansions have recently been built in your neighborhood, you may find your house value has risen in spite of a depressed over-all market. In addition, a house that has been recently renovated or expanded will see added value.
The total tax burden was decided by appropriations approved by voters at Spring Town Meeting last May. Under Massachusetts law, taxes on existing property can rise 2½% per year without an override vote. Properties new to the tax rolls can also be tapped at the prevailing rate without an override.
Beyond the 2½% increase, which is included in the basic budget, other factors that affect your tax bill include:
Overrides – permission to raise the tax level above 2½%. This becomes a permanent raise to the “levy” (base on which the 2½% is calculated next year). The appropriation must be passed both by Town Meeting and at Town Election.
Capital and debt exclusions – appropriations for spending of a capital nature. A capital exclusion results in a one time increase in the property tax levy for the fiscal year. A debt exclusion results in an increase in the property taxes required each year for debt service (principal and interest), and continues each year until the debt is extinguished. Both require confirmation at the ballot to take effect. They add to the amount of taxes the community levies, but are not permanent, and not subject to the statutory 2½% increase permitted each year.
CPA tax surcharge – In 2001 the town voted to apply a surcharge of 2% to tax bills under a state program to build funds dedicated to affordable housing, historic preservation, open space and recreation. The state provides matching funds for a portion of the money raised. This surcharge remains in place unless a future Town Meeting changes or removes it. The first $100,000 of assessed value is not subject to the surcharge.
Abatement requests due February 1
Property owners who believe there has been a mistake in their assessment can speak to Town Assessor Melissa Stamp and file an abatement request by February 1. Any documentation for price comparison should be from December 2008 or earlier as, by law, 2009 sales are not relevant to the current year’s assessment.
A program that provides exemption from some taxes for seniors who provide volunteer service to the town is available. In addition, the CPA surcharge is waived for certain income groups. ∆
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