The Board of Assessors has nearly completed its adjudications on the flood of property tax abatement applications it received early this year after a state-required recertification process led to a dramatic shift in townwide property assessments.
The board revised the assessments of approximately 44% of the nearly 400 properties whose owners applied for a reduction. Altogether, the tax for those owners who succeeded in making the case that their properties were overvalued by the town was reduced by more than $500,000.
For residential properties, the median reduction in property valuation was just above 10%, lowering the median tax bill on those properties by around $1,500, according to a spreadsheet provided by the town’s assessing department earlier this month.
In a typical year, between 50 and 60 abatements are sought in Needham. The board this year received applications from 255 residential taxpayers and 134 commercial property owners who were objecting to valuation changes that first appeared on the property tax bills they received in early January.
State law requires municipalities to “recertify” their property values every five years to ensure they reflect a property’s fair market value. During the most recent five-year period, Needham residential real estate experienced a nearly 50% increase in assessed value, going from $9.5 billion to $14 billion.
Collectively, assessments in Needham had not kept pace with the considerable appreciation in fair market value. Catching up required adding some $2.5 billion in value in just one tax year, a more than 20% jump.
The burden fell more heavily on owners of smaller lots where land values make up a higher percentage of the overall real estate tax bill. Hundreds saw their bills increase by upwards of 40%, largely due to the increase in the market value of their land. While the total property tax levy increased by a fairly typical 4.3%, individual property tax bills varied considerably.
The volume of abatement requests required the board, which typically meets on a monthly basis, to begin holding nearly weekly meetings. It typically conducted more than a dozen reviews per meeting, which were done in non-public executive sessions.
The process is now substantially complete, although 27 taxpayers have appealed denied applications to the state Appellate Tax Board.
Lessons learned?
State law requires that revaluation of all taxable properties be conducted by an outside consultant. In March 2024, the town engaged Tyler Technologies, a national firm that possesses both the technical expertise and the scale to undertake a project that is beyond a small municipality’s capability.
The revaluation coincided with the departure of the town’s former Director of Assessing, Melissa Motta, who went on leave in mid-summer and separated from the town in January. She was replaced by Julie Castor-Deas, who began work April 28, when the abatement process was already well underway.
“It was clearly a bit of a shock to people,” she said of trying to explain the recertification process to those who had filed abatement requests. “However, the state does require us to be in line with market value. And we were under-assessed for quite some time.”
“As a new assessor stepping in, I’m just making sure that I’m on top of sales, making sure I’m on top of the market approach and how we’ll be assessing homes moving forward,” said Castor-Deas.
Needham has more than 8,400 single-family homes and more than 11,000 total housing units. There are also hundreds of commercial and industrial properties whose valuations are determined by a different, income-based formula.
The town derives more than 80% of its property tax revenue from residential properties and keeping up with those values on a property-by-property basis is a challenge. A home sale or a substantial permit application can lead to a property having its assessment adjusted. Castor-Deas said she is looking to do more “cyclical” reviews to keep assessments accurate.
“We’ll try to get into every home at least once every 10 years,” she said. “And by trying, I mean we go door-to-door, just confirming our information’s correct so that we can have our data correct because we’re trying to be fair and equitable.”
She acknowledged that, in some of the abatement cases, the abatement was granted because the information the town had on file for a property was not accurate.
“Unfortunately, sometimes you do run into admin error,” she said.
“By chance, sometimes we’ll find it during an abatement. Somebody points out something that we may have missed and that’s how we’ll find it. By doing cyclical reviews, we’ll find that. But I’m happy to say that there were very few clerical ones here.”
Castor-Deas said explaining fair market value is a straightforward process. “You’re seeing a home being sold for $1.5 million only to be knocked down. That establishes the value of the land at $1.5 million.”
“After speaking to residents about that, most of them understood. It’s because we are in a town that people want to be in.”
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