The early returns on this year’s high volume of property tax abatement requests indicate that a majority of applicants may be successful and the tax savings will average around 10% for residential taxpayers who successfully sought abatements.
The town property tax structure was skewed earlier this fiscal year after a mandatory five-year recertification process led to properties with smaller lots receiving more dramatic valuation increases due to the increasingly high value of land in Needham.
While the average tax bill increased by a pedestrian 4.3%, individual property tax bills varied widely. Hundreds of owners of smaller lots saw their tax bills increase by upwards of 25%. Owners with large lots fared better, with some seeing modest decreases.
A similar disruption occurred among commercial properties, although for different reasons as commercial properties are assessed through a different formula.
The turbulence led to the Board of Assessors receiving 375 applications for abatements – five or six times the annual norm in non-recertification years. The board received 263 residential abatement requests and 112 from commercial property owners, all claiming the town had overvalued their properties and thus overtaxed them.
Through April 15, the board had completed its review of nearly 100 of the abatement applications. There were 57 applications approved (53 residential and four commercial) and there were 36 denials (26 residential and 10 commercial). Six other applications were withdrawn.
The successful applications resulted in abatements that lowered tax bills by a total of $251,358. However, two-thirds of that value came from just two commercial property abatements. According to town Finance Director Dave Davison, the median adjustment to those granted abatements was a 9% reduction in value.
The successful residential applicants have received, on average, about $1,500 in tax relief but the amounts fluctuate from the low hundreds to the $5,000 range.
Davison emphasized that each abatement application is treated as an individual case. “Each abatement is based on the specifics of the property,” he explained. “To be granted an abatement it must be an issue with the valuation, not the amount of tax.”
Abatement applications succeed for a variety of reasons. Davison said these can include “incorrect information regarding the condition or description of the property, an easement that was not included, a regulatory restriction that actually impacts the value of the property, and/or an overvaluation.”
The 36 unsuccessful applicants were likely denied because the board found the town’s assessment accurately reflected the property’s fair market value. These applicants can appeal that decision to the state Appellate Tax Board.
The three-member board has been meeting on an almost weekly basis to review and vote on the abatement applications. The reviews are held in non-public executive sessions. Abatement reviews are considered confidential as they can reveal personal financial information.
The deadline for applying for abatements has passed, but the review process is expected to continue into the summer.
Save as PDF