Revaluation Process
Board of Assessors
Overview of the Property Revaluation Process
Next Revaluation 2012
The law in Massachusetts requires that all property be assessed annually at 100%
of its full and fair cash value – the price a willing buyer would pay to a
willing seller (arms length transaction). The rationale for full value
assessments is equality. Houses of equal market value in a community should be
equitably assessed. The Assessors of each community are responsible for
developing a program to accomplish a fair cash valuation of all property within
the community. In addition, a continuing program of equalization must be
developed to maintain fair cash values. The first step is to bring all
properties in line with market conditions established by actual sales. This is
done in accordance with guidelines set by the Department of Revenue to meet
triennial certification requirements established by law. The Town of Clinton’s
current revaluation is taking place for fiscal year 2009.
Phases of a Property
Revaluation Program
1. Data Collection
The first step of a continuing
equalization program is periodic inspection of all properties, paying particular
attention to those undergoing renovation, that have recently sold, or have been
demolished. Inspection and data inventory of the structures on a parcel is an
important aspect of any revaluation program. Inspectors will generally inspect
each structure unless permission to inspect is denied. When inspection is
denied, the assessors will generally estimate the data sought based on
observations of the structure and neighborhood. In the case of a denial, the
inspector will estimate the value and characteristics of the property to be
equal to the best property in the neighborhood. This is to insure fairness to
those property owners who cooperate with the inspection process. If the
homeowner is not at home at the time of the inspection the data collector will
take the exterior measurements. Notification will be left at the property
informing the owner that an unsuccessful visit has been made and that the owner
should contact the Assessors Office to arrange an appointment. If no appointment
is made, the data collector will estimate the value and characteristics in the
same manner as if access were denied.
2. Sales Analysis & Data Quality Study
This step will review accuracy and uniformity of building inventories and
analyze the sale market. To accomplish this, a data quality study and assessment
to sales ratio studies are completed. The market analysis includes all
arms-length sales from January 1, 2007 to December 31, 2007. The Department of
Revenue does a data quality study and review of the market analysis. Valuation
is completed later in the process.
3. Value Determination
During this phase the
determination of market value for every parcel of property within the town is
made as of January first (New construction as of June 30, Chapter 653). Any sale
used as part of this analysis must meet the guidelines of an arms length sales.
Arms length sales are generally defined as any sale between a willing buyer and
a willing seller, where both parties are reasonably informed about market
conditions and where neither is under any undue stimulus. Sales that result from
estate settlements, foreclosures, Short Sales, divorce or pending divorces
generally would not be considered arms length transactions. Any non-arms length
sale as defined in the Department of Revenue’s Guidelines for Classification and
Taxation of Property According to Use Property Type Classification Codes will be
noted, but not used for analysis. There are three accepted approaches to value;
the market approach, the cost approach and the income approach. The market
approach uses market sales of properties similar to the subject. The sales are
analyzed and adjusted for differences to forecast what the subject would sell
for on the assessment date (January 1st). The cost approach uses current
replacement or reproduction cost to estimate market value. Replacement cost is
the amount of money necessary to build a new building equal in utility and
functionality to the original. The value is calculated by estimating replacement
cost, deducting depreciation, and adding the value of the land. Depreciation is
an estimate of loss in value from any cause. The typical factors influencing
depreciation are age, physical condition, and functionality. The income approach
uses potential income of a property to calculate market value. This approach is
most applicable for those properties bought and sold for their income producing
capabilities. This approach considers the income stream that a property is
likely to produce and capitalizes the future benefits of ownership into current
market value. Single family homes are not typically bought and sold for their
income producing capabilities, therefore the income approach is not normally
used.
4. Value Review and Preliminary Certification
A final review of all values
will be done, these values are reviewed for accuracy and uniformity. A final
assessment to sale ratio study will be prepared to demonstrate that assessments
represent full and fair market value and are uniform throughout the community.
Department of Revenue preliminary certification is requested at this time. All
required certification reports and spreadsheets are given to the Department of
Revenue’s Bureau of Local Assessments; they conduct a statistical analysis and
perform a preliminary field review. If all standards are met, the Bureau
notifies the Town of the preliminary certification.
5. Public Disclosure and
Final Certification
Once preliminary certification is given, the public
disclosure process begins. The public disclosure program is intended to provide
taxpayers with information about their new assessments. Upon completion of the
public disclosure program, the Assessors provide the Bureau of Local Assessment
with a list of all parcels that will have a proposed final value that differs
more than ten percent from the preliminary value previously certified.
6. Final
Approval from the Bureau of Local Assessment
The Bureau of Local Assessment
notifies the Town that the proposed values represent full and fair cash values.
The Town then starts the classification process.
Classification of Property
All
properties in the Commonwealth of Massachusetts are classified by use. The
Assessors determine the use of the property for the purpose of assessing taxes.
All Certified Assessors must meet minimum standards established by the
Commissioner of Revenue. All properties are classified according to one of the
following uses:
Class One – Residential
Class Two – Open Space
Class Three –
Commercial
Class Four – Industrial Personal Property
All properties in a
community must be classified even if the City or Town taxes all classes at the
same rate. Every community must assess all property at full and fair cash value.
Only communities that have done both can, at local option, allocate the tax levy
among certain classes of property. Clinton has historically implemented the CIP
shift in accordance with Proposition 2 ½.
Assessment Review and Abatement
Procedures
All property owners should review their new assessments for accuracy.
New assessments will be available in the fall prior to the 3rd quarter tax bill
issuance. Upon receipt of the third quarter tax bill, issued in late December, a
property owner who disagrees with an assessment may apply for an abatement. An
abatement application is a formal notice to the Assessors that the taxpayer
disagrees with the assessed value. The abatement process is the only legal
method to correct assessments once the taxes are committed for collection.
Application deadline dates will be included on the third quarter tax bill.
Assessors can only act on applications filed timely. Assessors must act on all
applications for abatements within three months from the date received by the
Assessors. Any abatement granted is for one year only. The abatement procedure
is intended to provide property owners with an appeal process. Owners filing an
abatement application are appealing the assessed value of the property, not the
taxes paid. The assessment must represent full and fair cash value.
Data
supporting the Tax Payers opinion of value should be presented at the time of
the abatement application. Suitable data would be sales of comparable properties
within the assessment sales analysis period, for Fiscal Year 2009 that sales
period is January 1, 2007 thru December 31, 2007, an Appraisal performed for Ad
Valorem value, values developed by construction cost tables, etc.
The Assessors
Office will accept all Applications for Abatement but the can only act to change
the value if there was a data error or the supporting documentation can suggest
that the assessed value was not accurate for the assessment period. The
Assessors can only determine your property value, they do not control the
spending of the Town and therefore can not control the actual tax amount that
you pay.
Click here to view Reval 2012 Values