Are you paying too much in property taxes? In this declining real estate market, many are.
Important 2011 property tax appeal deadlines are quickly approaching in the state of Massachusetts. For dealers who own or lease property in the state, appealing property taxes may be an avenue to substantial savings. No matter how valid the claim for relief, though, strict rules must be followed in order to ensure that an appeal is heard.
The 2011 fiscal year for local real estate taxes in Massachusetts began on July 1, 2010, and ends on June 30, 2011. As property is assessed as of January 1 preceding the fiscal year, a property’s ownership, condition and occupancy for the 2011 fiscal year were established as of January 1, 2010. A reduction of property tax in Massachusetts is called an abatement.
To obtain an abatement, three strict rules must be complied with. The first is that all real estate taxes indicated on the actual tax bill must be paid by the due date. For municipalities that use a quarterly billing cycle, the actual tax bill is generally due on February 1 and May 1. If quarterly payments are received by the collector or treasurer after February 1 or May 1, they are late, generally resulting in the loss of appeal rights. The quarterly bills due on August 1 and November 1 are considered preliminary tax bills, and while late payment of these bills will result in interest charges, it will not result in a loss of appeal rights. Payments of the actual tax bill must be received by April 1 in municipalities that use a semiannual billing cycle.
Abatement applications must also be filed with the appropriate assessor on time and on an approved form. The filing deadline for municipalities that use a quarterly billing cycle is February 1. For municipalities that use a semiannual billing cycle, however, the deadline for filing an abatement application is usually November 1. The precise due date for payment and application for abatement is listed on the face of the tax bill. Approved forms are available at the office of a taxpayer’s local assessor.
The local board of assessors must respond in one of three ways within three months to an abatement application: (1) deny the application, (2) grant a full or partial abatement, or (3) take no action. Within ten days of making a decision, the local board of assessors must send written notice of that action to the taxpayer. The taxpayer may then appeal the decision of the assessors to the Appellate Tax Board (ATB). The appeal to the ATB must be made within three months of the date of the assessors’ action or, if no action was made within three months, the appeal to the ATB must be filed within six months of the date of filing the application for abatement with the local board of assessors. Proper forms for appeal to the ATB are available at the ATB office or online at www.mass.gov/atb/forms.html. Appeals to the ATB must be timely to avoid losing the right to appeal a local board of assessors’ decision.
Upon filing of an appeal, the local board of assessors may request information reasonably related to determining the fair market value of the property, including income and expenses generated from the property. Failure to provide this information to the local board of assessors or to the ATB may result in the dismissal of the abatement application.
Tenants and mortgage holders may also qualify to file tax abatement applications. A tenant obligated by a lease to pay more than half the tax on the property may file an application for abatement, so long as the tenant has paid that tax. Before filing, a tenant should confirm that a tax abatement application complies with the terms of the lease. A mortgage holder may apply for a tax abatement between September 20 and October 1 of the fiscal year if the property owner does not elect to pursue an abatement and the holder of the mortgage pays at least one half the tax due on the property.
While a tax abatement application may result in tax savings, there are strict rules that must be followed. As the filing deadlines for the 2011 fiscal year approach, keep these rules in mind in evaluating whether to seek an abatement