How to get a Real Estate Tax Abatement

Real estate taxes are one of the “big three” expenses landlords face (the others being interest and insurance). It makes sense to pay attention to your assessed value and file for a real estate tax abatement if you feel the property may be over-assessed.

To get an abatement, you generally must file on or before the date the first installment payment is due for the new fiscal year. In communities that bill quarterly this is often the first weekday on or after February 1.

The abatement form is very simple. This leaves you no room for error. You need a tight case and you need to make sure you understand about assessment lag:

  • Taxes are based on the assessed value as of January 1 in the prior year.
  • Assessed value is calculated using sales data prior to that date (over one year ago).

For instance, if you’re filing for a FY 2015 abatement, you need to appeal the value as of January 1, 2014, and you need to know the market prices of similar properties sold in late 2013, over one year ago. This can create confusion in times of fast upward or downward market movements. In a rising market, assessments will seem too low, and in a falling market, assessments will seem too high.

Appeals are filed with your municipal assessor’s office. Under certain circumstances, you can appeal the local decision to the state-wide appellate tax board. See, for instance, Real Estate Tax Appeals: A Helpful Guide for Taxpayers and Assessors. That link comes from the state site on taxes.

One of our members generously contributed an example of a successful appeal. We’ve blacked out her personal information, but the key part is her written description. She makes the case for a lower valuation on the basis of another assessment. She deals with assessment lag implicitly by talking about how nothing has changed in a long time, and she mentions a restricted deed as a special reason why her full and fair value might be lower than market price.

Members can follow this example as inspiration for their own appeal.

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