The FY 2023 (July 1, 2022 to June 30, 2023) tax rate has been set at $10, compared with $10.52 in FY 2022.
While the median single family assessment increased 9.4 percent, or $69,400, to $807,400, the median SFH tax bill increased by less than half that — 4 percent, or $310 — to $8,074. The commercial rate has once again been set at the same level as the residential rate.
Note that the tax rate includes the cost of debt exclusions voted by residents. Debt service accounts for $1.25 of the 2023 tax rate, similar to the $1.27 in 2022. Excluding the cost of debt service, the tax rate fell from $9.25 to $8.75.
Marblehead’s 2023 tax rate is the fifth lowest of the 34 cities and towns in Essex County. The highest rate in Essex County belongs to Wenham at $17.35, the lowest Newbury at $8.67, and the median is $11.72.
Approximately 75 percent of Marblehead’s revenue comes from property taxes.
Real-estate assessments for Fiscal Year 2023 were mailed at the end of last year.
Q. What is the time frame upon which assessments are based?
A. For FY 2023, assessments are based upon values as of January 2022, using sales data for calendar year 2021. Sales that took place in calendar year 2022, therefore, will be the basis for the assessment for FY 2024.
Q. Is there a minimum requirement for assessment purposes?
A. The assessment process requirement is 2 percent for each property class, or a minimum of 20 units. Where there are fewer than 20 sales, as in categories such as multi-families and commercial, data for 24 months is used. For FY 2023, that period is July 2020 to June 2022.
Q. Can I appeal my assessment?
A. Yes, provided the appeal is based upon data for the relevant year (2021 to appeal this year’s assessment). More information and directions for filing an application are available at marblehead.org/assessors-office.
Q. What is the process for appealing my assessment?
A. An appeal for abatement can be made after receipt of the third quarter tax bill mailed in December and no later than Feb. 1. The appeal, which must be based upon valuation during the relevant period (i.e., 2021 calendar year sales for the current assessment), must specify the reason for the complaint. A current appraisal is not relevant. The assessor’s office will analyze the property and the information provided. If the data is incorrect or there is evidence provided that the valuation is wrong, the assessor’s office will change the valuation.
Q. Does the assessment process include all transactions that occur?
A. The process includes all arms-length transactions. Excluded are non-arms-length transactions, such as those involving foreclosure, bankruptcy, estate sales, divorce and the purchase and sale following remodeling.
Q. What is the authority under which assessments are made?
A. Chapter 59 of the Massachusetts General Laws. The process is overseen by the Department of Revenue.
Q. How does Prop 2 1/2 affect assessments?
A. The tax levy on all property in Marblehead in aggregate (not on individual properties) can be increased by no more than 2 1/2 percent per annum. To this total is added the tax on new growth (such as new construction, condo conversions, any improvements/parcels taxed for first time) and any overrides or debt exclusions, to calculate the new tax levy.
Q. What are the measurements used in the assessment process?
A. An assessment-sales ratio is calculated for each property sold by dividing the current assessed valuation by the sales price. A property assessed at $100,000 that sold for $100,000 would have an ASR of 100 percent. If that property sold for $110,000, the ASR would be 91 percent ($100,000/110,000). If the property sold for $90,000, the ASR would be 111 percent ($110,000/90,000).
A second factor is the “coefficient of dispersion,” which indicates how tightly the ratios are clustered around the median ratio. The lower the COD, the greater the uniformity in appraised values. With a COD of 10 percent, for example, the range of ASRs should be 90-100 percent.
Remember that the assessment is based upon data from earlier years, not the current year. A property that sells in 2023, for example, will be assessed based upon data for the year 2021. As the market has risen in the last two years, it would be reasonable to expect that the current market price would be higher than that on which the assessment was based.
Q. What are the state requirements for assessment values?
A. Assessments by law in Massachusetts are 100 percent of full and fair cash value, more commonly referenced as market value.
The ASR for residential property must be in a range of 90-100 percent, and the COD must be no more than 10 percent. The ASR must be consistent throughout town for all types of property, both by classification — e.g., residential or commercial — and by price range. The purpose is to prevent one class of property subsidizing others.
Q. What happens when property changes hands — what does the assessor’s office do?
A. The assessor’s office receives data on all sales and sends out a questionnaire to the new owner. This data provides background information and is taken into account for subsequent assessments.
Q. What happens when improvements are made?
A. The assessor’s office receives copies of all building permits and visits every site for which a permit is pulled. The assessor’s office determines the progress of work as of July 1, regardless of the status at the building department.
Q. Which improvements have the greatest/least impact on assessed values?
A. The greatest: new construction, additions, bathrooms and kitchens. The least, those that minimize deferred maintenance: siding/roofing/windows — items that are expected and integral to functionality and habitation.
Q. How does Marblehead tax commercial property?
A. Each year, the assessor’s office presents to the Select Board a schedule showing the impact of implementing a commercial rate that is allowed, by law, to be higher than the residential rate. In Marblehead, 95 percent of property is residential, so the imposition of a separate, higher commercial rate would have a disproportionate impact on commercial taxes.
Indeed, if the share of the tax bill paid by commercial owners were increased by the maximum 50 percent, the reduction in the tax paid by the median homeowner in FY 2023 would be just $202 per annum, while the increase on a similarly assessed commercial property would be $4,037.
Q. Are there exemptions available?
A. Statutory exemptions, for which the town is reimbursed by the state, are available for eligible taxpayers and include exemptions for the elderly, veterans, the blind and widows. More information on exemptions is available from the assessor’s office, 781-631-0236, or e-mail, firstname.lastname@example.org. Please take advantage of those for which you are eligible.
Q. How does the Senior Work-Off Program work?
A. Opportunities for duties such as filing, phone coverage and light clerical work are available for senior citizens through the Senior Work-Off Program. Seniors over 60 who meet certain income guidelines can earn a rebate on their taxes of up to $750. Applications for this program go through the Council on Aging office in the Judy and Gene Jacobi Community Center on Humphrey Street, 781-631-6737.
Q. What is the outlook for FY 2024 assessments and tax rates?
A. The FY 2024 assessments will be based upon sales in 2022, when the median price of SFH sales reported in MLS increased 10.4 percent to $938,000.
It is likely, therefore, that residential assessed values will be going up again in FY 2024, and that the tax rate itself will fall.
Andrew Oliver is the market analyst for Team Harborside, and author of OliverReportsMA.com, a real estate blog covering real estate and real estate-related topics in Essex County and beyond.