Friday, December 10, 2010
How to interpret tax bills after property revaluation
In an effort to reduce shock when tax bills are opened in January, the Board of Assessors and Assessor Melissa Stamp met on December 2 to offer information regarding the most recent revaluation of Carlisle property.
All real estate values are based on an assessment held a minimum of once every three years, with the last required assessment in 2010. The just-completed interim assessment for 2011 was undertaken because sales indicated real estate values had fallen, “We like to keep on top of it,” says Chair Jim Marchant. “We want assessments right at values.” He adds, “Taxpayers are not too happy if the assessments are too high.” In January, the Board of Assessors will look at sales prices throughout 2010. “We’ll see if things are stabilizing, and whether it’s worth another interim,” says Marchant. The next required assessment is in 2013.
The board answered questions many property owners may ask:
Why doesn’t lower valuation mean lower taxes?
The goal of assessment is to fairly distribute the tax burden based on the value of property. As a result of Town Meeting votes last spring, Carlisle must raise an additional $496,000 over last year. Assessor Melissa Stamps notes that spending of $24,363,229 was approved, and after $3,373,499 in fee revenue and excise taxes is subtracted, $20,989,730 must be raised through taxes. With only nine commercial properties in town, 98% of this amount is covered by residential real estate taxes.
The tax rate is the result of dividing the taxes that must be raised by the total value of property in town. Because property values have dropped 7%, on average, and the total tax is up, the tax rate has to rise, from $14.62 per thousand dollars of value to $16.13. So while most homeowners will see a decrease in valuation, “the average taxpayer is not going to see a reduction (in taxes) because of the off-setting rate,” says board member Ken Mostello.
Carlisle’s new tax rate probably puts us among the top five highest in the state, says Marchant, noting that some communities have not yet set rates. But the town is also the third wealthiest in terms of average property value.
Why is my home’s change in value different from others in Carlisle?
“It would be easy if we could lower everything 7%,” says Marchant. However, the state Department of Revenue (DOR) requires that a variety of factors be analyzed for their impact on the change in value. Style, size and condition are just a few of the factors. In addition, neighborhood ratings were recently reevaluated, so homes in some neighborhoods will retain more value than others.
Land values are down 7.5% overall, making up 5% of the 7% decrease in value. Properties with a high land percentage will see more impact on value. On the upper end, buildable land in an excellent neighborhood is valued at $470,500 per two-acre lot while ower end lots are valued at $348,500. “Land values are generally holding,” says Marchant, comparing Carlisle to nearby towns that have seen much larger reductions. He notes that developers are willing to wait to get their price for lots in executive neighborhoods, and there are currently 30 lots on the market in Carlisle.
The demand for teardowns has dried up as a result of the high lot inventory. This lowers values for homes in poor condition, which may have been worth more as teardowns than as fixer-uppers. “Teardowns supported demand for small houses,” says Marchant.
Why is my house valued more than that a similar house that just sold?
Assessments can lag behind current market value because they are based on sales that took place months ago. By law, assessors consider the most recently completed calendar year, or January 1 to December 31, 2009 for the 2011 revaluation. “In a declining market people are never satisfied with their assessment,” said Mostello, noting the over-valuing applies to everyone in town, and so should not greatly affect a property’s tax burden.
What if I disagree with the valuation?
Town assessors do not have the latitude to change a valuation except in the case of an error in classifying the property. According to the Secretary of the Commonwealth, by law, “values in Massachusetts are based on full and fair cash value or 100% of fair market value.” The values for the 2011 assessment have been certified by the DOR.
Marchant notes that Stamp visits every property in town that sells for a price that is inconsistent with the assessed value, and that she will eventually visit every property on the books to check accuracy. “Our mandate is to be fair, and I think we are fair,” he adds.
If you have questions, contact Town Assessor Melissa Stamp at Town Hall. A request for abatement must be received within 30 days of receipt of the tax bill. ∆
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