With overall property valuations in town having increased by nearly one-quarter over last year and with a more dramatic impact on smaller lots, the assessors office is bracing for an increase in abatement requests for reductions in property tax bills ahead of a Feb. 3 deadline to apply.
Throw in a printing error that resulted in more than 2,000 tax bills needing to be reissued due to incorrect information, and the assessing office in Town Hall has become a far more frequently visited venue in recent weeks.
“People have been coming in, checking up on the value of their property and getting an understanding of why it changed,” said Dave Davison, the deputy town manager and director of finance.
The visits have been prompted by the results of the required five-year reassessment of the town’s more than 11,000 taxable properties to assure that all valuations reflect each property’s fair market value. The reassessment led to a shift in the relative tax burden onto owners of properties with smaller lots.
“In a recertification year, the whole town gets looked at,” Davison explained. “The uptick in land value was the primary driver. The land portion of the assessment went up an average of 40% across the board.”
In a town where houses are often sold for more than $1 million only to be knocked down, it was inevitable that the fair market value of the land alone would dramatically increase.
“There were some that went up more; there were some that went up less. But the average was 40%,” said Davison.
This meant the valuation increase was felt most heavily among properties with smaller lot sizes, where the “land” portion of the bill can be two to three times larger than the “building” portion, which was not materially influenced by the recertification process. The owners of these properties, along with elderly and disabled homeowners, are more likely to file abatement applications or seek other avenues for relief.
Making the case for an abatement
An abatement is a reduction in the tax assessed on a property. In a typical year, between 50 and 60 abatements are sought in Needham. Considerably less than half of abatement applications prove to be successful, officials said.
“The reason for that is we’ve done the work. Short of us having incorrect data about your property or something unique about your property that wasn’t captured in the valuation, the values are going to hold up,” said Davison.
Still, this is not expected to be a typical year in terms of the volume of abatements sought, as applications tend to increase after recertifications occur. However, abatements seeking relief from values that increased solely due to the revaluation effort are not grounds for an abatement under state law.
The town’s website offers a guide to the abatement process, and applicants will need to provide offers of proof that extend beyond financial hardship – although there are avenues for elderly and disabled individuals to pursue where financial hardship offers a chance for relief even when the assessment is not in question.
The road to a successful abatement requires the applicant to offer some evidence that the town erred in establishing the property value. For example, if the applicant thinks the land value is incorrect, this needs to be shown by offering at least three examples of comparable sales that support the applicant’s opinion of value.
Applicants who can point to errors on the town’s property card for their homes are better positioned for success if any property card errors contributed to an inflated value – perhaps by including acreage, rooms, features or improvements/enhancements that don’t actually exist.
Davison noted that requests for abatements “have to be based upon what’s happening in the marketplace.” Assessing officials have suggested homeowners check the estimated value of their homes at online real estate sites such as Zillow or Redfin as a starting point to see if those estimates diverge from the town’s estimate.
Davison said he did not know how many requests have been received to date. “Most of the filings happen the last few days before the deadline. That’s been the experience.”
The Board of Assessors’ next meeting is scheduled for Jan. 27 at 9:15 a.m., ahead of the Feb. 3 deadline. The board has a standing agenda item for taxpayer appointments and the abatement process is likely to be discussed.
Not a windfall for the town
While the recertification led to a redistribution of the tax burden, it was a zero-sum game that did not add a penny to the amount of money the town is allowed to raise via the property tax levy. This is not a windfall of any kind for the town, Davison stressed.
“The revaluation doesn’t produce any more or any less money for the town,” said Davison. “It just determines what portion of the pie each individual (property) contributes.”
In the current fiscal year, FY25, the town expects to raise $192.4 million via the levy. Davison expects the levy for FY26 to be $201.8 million, an increase of $9.4 million, or 4.9%.
Commercial properties are taxed at a higher rate than residential properties, which contributes to a drop in the overall average residential increase to around 3.5%.
Michael Diener, one of the three elected members of the Board of Assessors, has reviewed the town’s valuations and estimates that roughly 40% of single-family residential taxpayers have seen their overall tax bills either remain relatively flat or even decrease, some by as much as 10%.
Another third, he estimates, have received low to moderate tax increases. The remaining one-quarter of single-family homeowners appear to be bearing a more considerable burden, with reports of some experiencing increases of one-third or more over last year’s tax bills.
“The problem, which I can completely empathize with, is how this affects the folks in the smaller homes,” said Davison. He explained that the $1 million-and-up sales prices for smaller, older homes that are subsequently demolished establishes the fair market value of that land and the town is obligated to reflect those sales prices in its valuations.
“There’s just more interest in people buying smaller homes, and they bid up the prices,” he said. “The more expensive houses are not seeing these bidding wars.
“The assessments are required to be 100% of what you could sell the house for. That’s what the law says.”
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