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Proposition 2 ½ places constraints on the amount of taxes, which the Town can levy and on how much the Town can increase the tax levy from year to year. It provides the Town with annual increases in its tax levy of: 2.5 percent and an additional amount based on the valuation of certain new construction and other allowable growth in the tax base ("new growth"). With Proposition 2 ½, a minimum 2.5 percent increase in the Town's total tax levy can be expected each year.
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Assessors must value all real and personal property in the community to their full and fair cash value. Mass appraisal is the process used by every Massachusetts City and Town to create the property assessments. Assessments are based on an analysis of Hingham’s entire real estate market for a specified period of time. For Fiscal Year 2022, we use a valuation date of 1/1/2021 and analyze the sales from all of 2020.This study guides the setting of valuation parameters that are used to calculate the property values town-wide. It differs from the more well-known “bank” or fee appraisal. Although the appraisal concepts are the same and the results similar, the process is different. No particular sale or group of sales is used to determine the value of your property, but all of a certain calendar year’s sales are included in the analysis that set the parameters for the next fiscal year.
The assessment is an estimate of market value. The definition of market value is the price a willing buyer would pay a willing seller in an open, competitive market, without any undue influences. The assessment represents the estimate of market value as of January 1, 2021 for Fiscal Year 2022. This estimate of market value is determined by examining sales of properties from calendar year 2020. Although the majority of properties are not for sale, Massachusetts General Laws requires an assessment, or an estimate of market value, on every property. Sales of similar or comparable properties within a neighborhood are the best indicator of market value.
The Assessors look at a property the same way a potential buyer looks at a property. They consider the factors that a potential buyer considers. Examples of important factors are the following: Building style, livable area, quality of construction, number of rooms, baths, fireplaces, extra features like pools and detached garages – all are examples of the data collected. The Assessors examine many qualities and conditions and then look for comparable properties that have sold in comparable neighborhoods. Since no two houses are identical, adjustments are made for differing characteristics to determine the assessment. Thus the assessment is an estimate of market value.
The assessed value represents the estimate of market value of the property. The real estate market changes constantly. The assessment for Fiscal Year 2022 represents the estimate of market value as of January 1, 2021. This estimate of market value is determined by examining sales of properties from calendar year 2020. Although there may not have been any physical changes to the property, buyers may be paying more or less for properties than they were in previous years. The assessment changes reflect the changes in the purchase prices of similar homes in the neighborhood. The assessments do not predict market value. The assessments reflect (or report) market value. The real estate market can change dramatically from year to year. The assessments reflect what buyers and sellers are doing as of the assessment date.
Market value changes occur in many forms. Buyers have different requirements and these requirements sometimes change from year to year. Also, sometimes renovations have been performed on a property that would cause a change in assessed value different from a similar property that did not undergo renovations. A recent inspection by the assessor’s office also may have contributed to a change in assessed value. Perhaps the property had not been inspected in several years and the property information has now been updated to more accurately reflect the condition of the property.
Proposition 2 ½ limits the amount of taxes a community can raise from property tax. The assessment is an estimate of market value. Since the real estate market changes are based upon the buyers’ and sellers’ needs, there is no limit to the amount an assessment can increase or decrease. Assessment changes are always based on the real estate market. For example, if a property sells for $500,000 in calendar year 2020, there is no limit or minimum price it would sell for in calendar year 2021 or beyond. It could sell for $600,000, $700,000, $1,000,000 or $400,000. The sale price would be based on the real estate market at that time. The assessments do not predict market value. The assessments reflect (or report) market value.
If your opinion of the value of your property differs from the assessment value, by all means come to the Assessor’s Office and discuss the matter. The staff will be glad to answer your questions about the assessment procedures. When questioning the assessment value, ask yourself three questions:
Keep in mind what's important: sale prices, quality of construction, condition, your property's neighborhood designation, and the building area and lot area. These are the most critical factors in the valuation process. There is a variety of information available to help you determine whether your Assessment is fair and equitable. The staff will be happy to assist you, and no appointment is necessary. If, after discussing the matter with the staff and researching the assessments of comparable properties within your area, a difference of opinion still exists, you may appeal your assessment to the Board of Assessors by filing an Abatement Application (PDF).