Death and Taxes

Nancy Russell Vice President SELECT GMAC Real Estate www.nancyarussell.com

"In this world nothing can be said to be certain, except death and taxes." This of course is a famous quote from one of our country's founding fathers, Benjamin Franklin. It's hard not to think about taxes as the April 15 tax deadline looms. Most reasonable people understand that local taxes are necessary. They pay for town services: everything from school systems which educate our children to police who protect our neighborhoods. Also, most reasonable people are willing to pay their fair share, but not a penny more.

Over the last 10 years, property taxes have risen at more than twice the rate of inflation. During the housing boom, it was hard to complain since municipalities reassess "true market value" every few years. The homeowner artificially underpaid taxes as their property values were rising faster than their tax burden. Now with the turn-around in the real estate market, you may be over-paying. Housing prices have dropped in Central Massachusetts, as much as 20+ percent in certain neighborhoods. Depending upon the last time your town reassessed your property, you could be over-paying hundreds of dollars a year in real estate taxes.

According to the National Taxpayers Union, nationally less than one in 50 homeowners tries to appeal assessments, while up to 60 percent of properties are overvalued by assessors. Making an appeal will cost you nothing but time as most do not require the use of lawyers. With the rewards potentially in the thousands of dollars over a few years, it may be will worth the investment.

There are some things you need to know as you begin the process. First, abatement is a reduction in property tax granted by the assessor or, on appeal, by the Appellate Tax Board (ATB). Abatements are granted when you are able to prove that fair market value of your property is less than its assessed value. Second are jurisdictional requirements. In Massachusetts, the Legislature has established specific requirements which govern the tax appeal process. You must comply with these statutory jurisdictional requirements in order for the ATB to have authority to hear an appeal.

The appeal process begins at the local level with a community's board of assessors. You must file an application for abatement on the approved form with the local assessors in order for the assessor to consider the abatement request. There are deadlines which can vary from town to town. Forms are available at the local board of assessors' office. After submission, the assessor must send written notice to the taxpayer within 10 days of their action on the application. If the application is approved, you are granted the abatement of a specified amount. Of course, if denied, you receive no tax relief. However, you may file an appeal with the ATB in person or by mail. There will be a fee; for example, if the assessed value is over $100,000 and does not exceed $999,999, the filing fee is $100. The appeal must be filed within three months of the local assessors' response. It is important to note that during this period you are still required to pay your assessed taxes.

In preparation of your case, you need to prove that fair market value of your property for the fiscal year at issue is lower than the assessed value. The law provides that the fair market value of property is the price on which a willing Seller would sell the property to a willing Buyer in an arms-length sale if neither party was under compulsion and each was aware of all relevant facts. You will most likely fail if you show up to your hearing claiming simply that taxes are too high. It is important to do your homework and have an effective presentation. There are some elements which are key to success: description of property, a review of assessors' records concerning subject property, research sales of comparable properties, research of comparable assessments, and using an expert witness. Having your realtor help with preparation could make the difference between overpaying taxes and paying your fair share.

As Ben Franklin pointed out, it is impossible to cheat death and very difficult to get around paying taxes. However, it is likely to reduce your real estate tax burden in this down cycle. Homework, preparation and a little perseverance will go a long way toward tax reduction.

"Whatever Nancy touches turns to SOLD." Call me at 508-243-8128 or by e-mail NRussell@SelectGMACRealEstate. com. Visit my website for more information (www.nancyarussell.com) or stop by the office located at 45 S. Quinsigamond Avenue in Shrewsbury.