DLS City & Town

The turnaround time for New Growth submissions remained virtually unchanged at 74% within one week and 91% within two weeks.

The Median of Community Averages

Graph 1 shows the median or midpoint of the average single-family tax bill for all communities from FY2010 to present. For FY2020, this median tax bill of $5,382 represents an increase over FY2019 by $219 or 4.2%.

Graph 1

For the six communities without an FY2020 tax rate and not represented in Graph 1, none have historically averaged above the $5,382 median tax bill shown above. If FY2019’s median for these communities proves true once again in FY2020, the FY2020 median amount would drop by about $20.

The Average by Community

DLS calculates a community’s average single-family residential property tax bill by:

• dividing the total class code 101 assessed property values by the number of single-family parcels to establish an average property value for the class;

• multiplying that average property value by the community’s residential class tax rate as certified by the Bureau of Accounts for that fiscal year.

The following color-coded maps provide a visual representation of the FY2020 community averages around the state as well as their dollar changes from FY2019.

The map above shows how most of the communities in the western and central parts of Massachusetts have average tax bills at or less than the State Total of $6,186. The map also shows a cluster of communities with average tax bills over $10,000 just to the west of Boston.

The map above, in conjunction with the previous map, shows that although many communities in the western and central parts of Massachusetts had lesser average tax bills than the state total, a number of them had greater increases from FY2019 than the $193 increase in the state total.

Statewide, 308 communities increased their average tax bill from FY2019 ranging from $5 in Northfield and Warren to $1,979 in Lincoln. Fifteen communities actually decreased their average tax bill from FY2019 ranging from $14 in Dover to $517 in Edgartown. The median for all communities that decreased their average tax bill was $62. (Somerset was not a part of this calculation as the town had a residential exemption in FY2019).

Graph 2 shows that 71 communities have FY2020 community average single-family property tax bills in the $4,000 to $4,999 range followed by 62 in the $5,000 to $5,999 range category.

Graph 2

Graph 3 shows the number of communities increasing and decreasing their average tax bills from FY2019 to FY2020 by percentage increase and decrease. For example, one community decreased its average bill from greater than 8% to 9%, and 75 communities increased their average bill from greater than 3% to 4%. For the 15 communities that decreased their bill, their median percentage decrease was 1.7%. For the 308 communities that increased their average bill, their median percentage increase was 3.6%.

Graph 3

Chart 2 shows the communities having the 10 highest and lowest FY2020 average single-family residential property tax bills, both in descending order.

Chart 2

The Statewide Trend in Current and Constant Dollars

Chart 3 shows the state total and median of community averages in current dollars as presented earlier in this article in relation to a constant dollar which controls for inflation. The chart shows that both the state total and the median of community averages dollar amounts have outpaced the rate of inflation over the time-period shown. For example, the median of community averages FY2014 current dollar figure of $4,219 adjusted for inflation represents a constant dollar figure of $4,001 in that year. The FY2020 current dollars amount of $5,382 has outpaced the constant dollar figure by $864 or 16%. The state total current dollars amount has outpaced the constant dollars figure by $857, or by 14%. Note that the state total for current dollars is always in excess of the median for current dollars. Both dollar amounts may be compared respectively to prior fiscal years, but are not comparable to each other.

Chart 3

The Residential Exemption Communities

Communities that adopted a residential exemption or senior means-tested exemption for any particular fiscal year are not included in either the state total or median averages as DLS does not receive sufficient information as to how many class code 101 residential properties are eligible for the exemption in those communities.

For 15 communities that adopted the residential exemption only in FY2020, Chart 4 estimates the FY2020 dollar impact of the residential exemption on single-family residential properties valued at their break-even point. The break-even point, or point of benefit neutral assessment, is that point of assessed valuation less the exemption at which the tax burden for residential class properties begins to shift, i.e. when the residential class property taxpayer begins to pay less or more property tax than if the exemption wasn’t voted at all. The impact column shows how much more this property would pay if it was not eligible for the exemption.

Chart 4

For more information on the state total, average bills for communities, and statewide rankings, please see our Data Highlight of the Month.

Data Highlight of the Month: Average Single-Family Tax Bill

DLS Data Analytics & Research Bureau

Today’s City & Town featured a review of the FY2020 Single-family tax bills, but did you know on the DLS website we have historical data relating to single-family tax bills dating back to FY1988? Under the Reports relating to Property Tax Data and Statistics, you can find this history as well as property tax data relating to assessed values, tax rates and much more.

The Average Single Family Tax Bill report not only contains a wealth of data, but also charts trends in tax bills and provides the state average single family tax bill to assist in benchmarking the community tax bill in relation to the state average. (Please note that any community that grants a residential exemption is not included in these reports because DLS does not collect enough data to determine the average value in these communities.)

We hope you become better acquainted with the data the Division of Local Services has to offer through the Data Highlight of the Month. For more information, contact us directly at databank@dor.state.ma.us or (617) 626-2384.

Ask DLS: Community Preservation Act - Part 2

This month's Ask DLS features the second part of frequently asked questions concerning the Community Preservation Act (CPA). Additional questions about the CPA will be featured in future editions of City & Town. For Part 1 of the series, see the January 9, 2020 edition of City & Town. For additional information, see Informational Guideline Release (IGR) 19-14, Community Preservation Fund. Please let us know if you have other areas of interest or send a question to cityandtown@dor.state.ma.us . We would like to hear from you.

Are there any exemptions a city or town may adopt regarding the surcharge?

Yes. The legislative body may include any or all of the following surcharge exemptions in its adoption of the CPA. The exemptions must be approved by the legislative body or included in a petition to adopt the CPA and, in each case, the exemption must be approved by the voters. G.L. c. 44B, § 3(e). The CPA allows the following exemptions:

1. An exemption for property owned and occupied as a domicile by a person who would qualify for low income housing or low or moderate income senior housing in the community. G.L. c. 44B, § 3(e)(1).

   1. 1. Age - To qualify as a senior, the applicant must be 60 or older as of January 1.

      2. Income Limits - Each co-owner of the domicile must meet a household annual income standard to qualify for the low income or low or moderate income senior exemption. The income standard is based on the area wide median income determined annually by the United States Department of Housing and Urban Development. Therefore, assessors must establish new limits for each year. Annual household income is the income received from all sources regardless of income tax status under federal or state law during the calendar year preceding January 1 by all members of the household 18 or older who are not full-time students, less deductions for dependents other than a spouse and certain medical expenses. That amount must be at or below the allowable income limit for the household type (senior or non-senior) and size.

1. 1. 3. Exemption Amount - A qualified taxpayer receives an exemption of the entire surcharge attributable to the real estate tax assessed on the Class One, Residential, assessed valuation of the parcel, regardless of ownership share or number of residential dwelling units.

2. An exemption for Class Three, Commercial, and Class Four, Industrial property if the community annually adopts a higher tax rate for those classes. G.L. c. 44B, § 3(e)(2). This is a total exemption from the surcharge and applies only in a fiscal year in which the tax rate is split. If a property is multiple-use, the exemption applies to the real estate tax assessed on the portion of the assessed valuation allocated to commercial and industrial.

3. An exemption for $100,000 of the assessed valuation of Class One, Residential parcels. G.L. c. 44B, § 3(e)(3). If the property is multiple-use, the exemption applies to the real estate tax assessed on the first $100,000 of the portion of the assessed valuation allocated to Class One.

4. An exemption for $100,000 of the assessed valuation of Class Three, Commercial and Class Four, Industrial parcels. G.L. c. 44B, § 3(e)(4). If the property is multiple-use, the exemption applies to the real estate tax assessed on the first $100,000 of the portion of the assessed valuation allocated to commercial and industrial.

For example, Anytown has accepted an exemption for the first $100,000 of value of residential (Class One) properties and an exemption for the first $100,000 of value of commercial/industrial (Class Three and Four) properties. A property has an assessed value of $500,000 allocated as follows: $200,000 Class One and $300,000 Class Three. The CPA surcharge will be on the real estate tax assessed on $100,000 Class One and $200,000 Class Three.

How does a taxpayer apply for an exemption?

Taxpayers must apply annually for the low income or low or moderate income senior exemption. Application may be made on Form CP-4. or other format developed by the assessors to obtain the same information. Assessors do not need prior approval of the Commissioner of Revenue to use forms they have designed so long as the content is essentially the same as Form CP-4. Assessors may review applications submitted by seniors for a G.L. c. 59, § 5, Clause 41, 41B or 41C personal exemption or Clause 41A tax deferral to determine eligibility for the low or moderate income exemption as well. In those cases where no further information is needed to establish eligibility for the exemption, it may be granted without requiring completion of a separate application.

Is there a deadline for applying for an exemption?

An application for exemption must be filed on or before the deadline for an application for exemption under G.L. c. 59, § 59 - April 1 of the year to which the tax relates or 3 months after the bill is issued, whichever is later.

Is there an appeal process?

Any person aggrieved by a decision of the assessors, or by their failure to act, on an application for exemption may appeal as provided in in G.L. c. 59, §§ 64 – 65B.

How do communities account for abatements/ exemptions?

All committed surcharge amounts abated or exempted are charged to the community preservation surcharge receivable of the fiscal year. This includes reductions in committed surcharges resulting from an abatement or exemption of the real estate tax , or an abatement or exemption of the surcharge itself. The abatement or exemption certificate, as well as any abatement and exemption reports to other officers, should state separately the amount of any surcharge abatement or exemption granted.

What forms do assessors use to approve/deny an exemption?

Assessors may determine their own forms for approvals/denials of exemptions by adapting their ordinary real estate abatement/exemption notices.

Stay tuned for next month’s City & Town for Part 3 in our FAQ series on the CPA.

RMV Excise Update 2020

Joan Valley - RMV ATLAS Business Lead

The first 2020 ATLAS-generated excise tax file link was included in an RMV email sent to assessors on January 17, 2020. You can access the “RUN 1” file by clicking on the link within the email or logging in directly to MOVEit here https://transfer.massdot.state.ma.us to download your file.

The January file “RUN 1” includes the remainder of 2019, all the 2020 bills, and, for the first time, Section Five bills. To help municipalities identify the bills by year, there are header rows separating the 2019 bills from the 2020 bills.

“RUN 2” will be sent to municipalities on March 13, 2020. The complete calendar, can be found on our Business Partners website here: 2020 Excise Tax Schedule.

Webinars

The RMV hosted their most recent webinar on January 23, 2020 about the new ATLAS system and the changes to the excise tax bill process. All webinars and associated questions and answers, documents, information, and training support can be found on our Business Partner website.

Calculating the Excise Tax Bill

After consulting with the DOR, the RMV is calculating the excise tax to the nearest penny. The RMV has discontinued the practice of rounding up to the nearest dollar. This information was also presented in the webinar from August 29, 2019.

Helpful Links

Go to the Excise Tax Commitments Program page, click on Technical Information for several links about excise tax information including:

• 2019 Excise Totals by Municipality

• 2020 Excise Totals by Municipality

• 2020 Excise Plate Description

Note: The Technical Information page is a secure site and requires login access. To request access, please email ATLAS.municipalities@DOT.state.ma.us

The RMV will keep you updated about any changes regarding the excise tax files and bills. If you have any questions for the RMV and the excise team, please email ATLAS.municipalities@DOT.state.ma.us.