Digging deeper into that good old property tax
It’s that time of year again...The Holidays are behind us and we can look forward to more turmoil in the year to come. One thing we can be sure of is that in this case politics can be put aside - the Tax Man has no party affiliation. As you sharpen your pencil to calculate last year’s bite from Uncle Sam, don’t overlook the sometimes forgotten State and Local taxes that lightened your pockets last year.
If you live in New Hampshire, like I do, you have no state income tax and no sales tax. That’s good, right? Not so fast. If you have a home, or own a commercial property, you have been paying Property Taxes. Often, we lose focus on this tax because it is rolled into a mortgage payment, but the total may represent a significant portion of your cost of living.
Property Tax is based on the “Market Value” of the property that you own and is set by the Town Assessor or their hired agent. The State requires that each Town re-evaluate the property values every five years. Due to the scope of this effort, no one property is evaluated with the scrutiny required by a formal appraisal. As a result, inequities do occur.
In New Hampshire, the State law allows “any person aggrieved by the assessment of a tax” the right to challenge the Town Assessment (RSA 76-16). You can get the form at most Town Halls, or download it from the state website HERE.
So how do you go about challenging the assessment?
The first step is to get a current copy of your property assessment. Most Town websites have a link to their Assessment Database where you can download the the assessment card, or you can visit your Town Clerk. Review this document for errors. Make note of any errors that may have increased the perceived value of the property, i.e. 4 acres of land when it should be 2, or the wrong square footage of the building, or even improvements that have been removed. Any errors are grounds for an abatement.
Next, examine the assessed values of similar properties. This is public information and can also be obtained through the Town Assessor Office. If your conclusion is that you are the victim of a “disproportional assessment”, you must list the other properties in town that you found to be valued at a lower amount and explain your reasoning. In effect, you are completing a market appraisal on your own property. This is always good information to have.
Of course, you can always call your local Real Estate Broker for a CMA (Competitive Market Assessment) or a professional appraiser for a formal market analysis.
Finally, fill out the forms and submit to the Town Clerk. The deadline is March 1st, so don’t delay.
David Morin is a Senior Real Estate Advisor with Berkshire Hathaway HomeServices Verani Realty in Londonderry, New Hampshire. He is President of Morin Asset Management Corp, a consulting practice focused toward Real Estate Development and Management as well as Management Consulting to companies in the printing, service, and retail industries. He also has extensive experience in mergers, acquisitions, and general business brokerage and holds an MBA in Finance from Boston University. He can be contacted for further discussion or consultation at: email@example.com or (603) 930-3192.
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