(Editor’s note: This is the second in a two-part series on how your tax bill is calculated, including the assessment process.)
Q. Why did my tax bill jump so much in Q3 (January to March 2024)?
A. The tax bills for the first two quarters of the fiscal year (July-December 2023) are estimated tax bills based upon the prior year’s assessment. When the new assessments are published in late December, the actual tax bill is recalculated for the fiscal year (July 2023 to June 2024), and the bills for Q3 and Q4 adjusted to catch up for any increase.
Q. What is the timeframe upon which assessments are based?
A. For FY2024, assessments are based upon values as of January 2023, using sales data for calendar year 2022. Sales that took place in calendar year 2023, therefore, will be the basis for the assessment for FY 2025.
Q. Can I appeal my assessment?
A. Yes, provided the appeal is based upon data for the relevant year (2022 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., 2022 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 (ASR) 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%. If that property sold for $110,000, the ASR would be 91% ($100,000/110,000). If the property sold for $90,000, the ASR would be 111% ($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 2024, for example, will be assessed based upon data for the year 2022.
As the market has risen in the last two years, it would be reasonable to expect that the current market price may well 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% 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. Are Marblehead’s assessments in line with market prices?
A. The period since COVID has seen continued strong demand for properties in Marblehead, with most properties seeing multiple offers and selling for more than list price.
This, together with the fact that assessments are based upon an earlier year, means that in 2023 the 164 single-family homes that sold had a median ASR of just 82% — or, put another way, the median home sold for 22% more than its assessed value. And 142 of the 164 sales were above assessed value.
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 are 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 FY2024 would be just $194 per annum, while the increase on a similarly assessed commercial property would be $4,169.
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, assessors@marblehead.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 on Humphrey Street, 781-631-6737.
Q. What is the outlook for FY2025 assessments and tax rates?
A. The FY2025 assessments will be based upon sales in 2023, when the median price of single-family-home sales reported in MLS increased 3% to $964,875.
This would suggest that tax rates in FY2025 will be relatively stable. We will have a clearer idea after the publication of the budget in February.
Former Marblehead resident Andrew Oliver is a Realtor, market analyst and referral specialist.
Andrew Oliver
Former Marblehead resident Andrew Oliver is a Realtor, market analyst and referral specialist.
