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Land values change at a different rate than improvement (structures) values. Since building costs and values have not changed at the same rate as land values, the bulk of any total change may be attributable to land. This makes good economic sense, as it is land that is in limited supply.
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Massachusetts law requires that all municipalities establish the full and fair cash value of all real estate as of January 1st of the prior year.
The Town then uses a software application from Vision Government Solutions, Inc., which includes a "Mass Appraisal" computer software model. This is used to calculate property values based on the market activity as well as certain property-specific attributes such as location, size, construction quality, style, and condition. Frequently Asked Questions about Vision and their software model
The courts have defined this phrase to mean "current market value"; the price arrived at by a willing buyer and a willing seller, each with a good knowledge of the market and each acting without undue pressure or compulsion. Thus, in determining value, assessors seek to approximate what property would sell for on the open market, within an acceptable range of error.
A revaluation uses mass appraisal methods and techniques, meaning we appraise many properties at once. Mass appraisal is typically done for property tax purposes and the effective valuation date for all mass appraisals in Massachusetts is January 1st of the revaluation year. A fee appraiser appraises only one property at a time. The appraisal is done for a specific reason, such as purchase, refinance, estate valuation, etc. The date of the appraisal is typically the day it is appraised.
Annually, the Massachusetts Department of Revenue (DOR) performs a statistical analysis of the Town's proposed assessments. Additionally, every five years the DOR conducts a comprehensive analysis of the Town's appraisal process and reviews property values in great detail to ensure that the assessments represent full and fair market values.
To effectively and equitably allocate your portion of all Town obligations, your property's assessed value is meant to reflect the market conditions for similar properties during the recent year analyzed (not the "current" market). Please be aware that your recent tax bill may have increased even if your property's market value decreased during the year analyzed.
Nevertheless, as a Lexington property owner, you have the right to "contest" your property valuation (assessment) by filing a written and signed application for the additional review of your own local tax assessment.
Abatement applications are available in the Assessors' Office at Lexington Town Hall during the month of January and online. Filing for abatement is an option only during the 30 days after the Town has mailed your Third (Fiscal) Quarter tax bill, which property owners normally receive in early January.
If you think your property's assessed value is "incorrect" you must specify your preferred valuation method or rationale and your differing opinion of value in a timely-filed abatement application. The Lexington Board of Assessors will have three months (approximately 90 days) to review your abatement application. Following its review, the Board of Assessors will send out written notification of its action within ten days.
Filing for local abatement does not alter your obligation to pay your tax bill. Each tax bill payment must be received timely by the Lexington Collector of Taxes in order to protect your further rights to appeal.
Your abatement review obligations: You must correctly and timely file your application. Thereafter, regardless of the rationale of your application, you must allow a Town employee full access to all areas of the interior and exterior of your property during weekday business hours during the week or weeks offered.
Assessors database is "frozen" prior to January tax bill mailing: The fiscal year (FY) valuation of all Lexington property was determined by the Assessors Office in the previous fall; subsequently our overall valuation methodology and our assessed values were approved by the Massachusetts Department of Revenue (MA DOR). Thereafter, the approved assessment database was "frozen" by our software vendor and during January, the data for each property was displayed on its website. The other public faces of our frozen database are 1) property record cards available at our front counter and the online database 2) on our webpage and 3) in summary form as the 200 page GBC-bound "Street Listing" booklet, available online and at our front counter.
Coupled with "freezing" the database, we open the new FY database. In that new file, we increase or decrease individual property values as driven by newly input data (abatement reviews, permit inspections, etc.) throughout the year. The resulting assessed value during the active year - at any given time - is the combination of contributing market factors from real estate transactions, use and changing land and building factors. For 12 months, the new FY database is a "work-in-progress" file and is not a public record. Later in the calendar year, our work on this file is concluded; it is then reviewed and approved by the MA DOR after which time it becomes public record.
Your right to appeal the local Board action: If you are dissatisfied with the outcome of your local abatement request, you may have the right to appeal for a courtroom hearing at the Massachusetts State Appellate Tax Board. This appeal must be prepared within three months of the Assessors action.
Interior inspections are an important part of the Town's assessment process. Just as a potential buyer of real estate inspects the interior of a home before making an offer, the Town tries to make a better determination of overall property value based upon accurate data using interior inspections. Examples of data reviewed include: dwelling type, condition, land area, living area, number of bathrooms, fireplaces and whether attics and basements are finished or unfinished.
It is the responsibility of the Assessors' Office to establish the taxable valuation of each individual piece of property in the Town. However, the Assessors do not create value. Buyers and sellers create the value via their transactions in the marketplace.
At Town Meeting each year, a budget is voted on by Town Meeting Members taking into account the limits of Proposition 2 1/2, and how much money will be needed to meet all appropriations and other expenses. The difference between the amount approved and the money received from other revenue sources (i.e., state aid, local receipts and available funds) must be raised by property taxation.
Valuation assessments are developed independently from the budget and are used only in the last step of the budgeting process to distribute the Tax Levy. Changing property values do not affect the overall Tax Levy, but it may result in the redistribution of the tax levy burden among all taxable properties in town.
Every year, the Select Board establishes the fiscal year residential and commercial/industrial/personal property tax rates. Those rates represent a tax per thousand dollars of assessed value which, when applied to each properties assessed valuation, yields that property's annual tax bill.
Proposition 2 1/2 pertains to the total amount of money raised by taxation, also known as the tax levy. Generally speaking, the tax levy may not increase greater than 2.5 percent over the prior year’s levy plus a factor referred to as new growth which captures the increase in valuation and the tax levy attributable to new construction. However, this limitation does not pertain to individual tax bills. Your bills may increase or decrease by any amount in any given year. Find out more about Proposition 2 1/2 (PDF).
There are multiple programs that offer tax relief to qualifying property owners including state and local tax relief. Find out Property Tax Relief Programs (PDF).