Helpful Terms

Abatement

A reduction or elimination of a real or personal property tax, motor vehicle excise, a fee, charge, or special assessment imposed by a governmental unit. Granted only on application of the person seeking the abatement and only by the committing governmental unit.

Ad Valorem

A Latin phrase meaning according to the value. For example, the property tax is an Ad Valorem tax because it is based on the full and fair cash value (FFCV) of the real or personal property.

Appellate Tax Board (ATB)

Appointed by the governor, the ATB has jurisdiction to decide appeals from local decisions relating to property taxes, motor vehicle excises, state owned land (SOL) valuations, exemption eligibility, property classification, and equalized valuations.

Appropriation

An authorization granted by a town meeting, city council or other legislative body to expend money and incur obligations for specific public purposes. An appropriation is usually limited in amount and as to the time period within which it may be expended.

Assessed Valuation

A value assigned to real estate or other property by a government as the basis for levying taxes. In Massachusetts, assessed valuation is based on the property's full and fair cash value (FFCV) as set by the Assessors.

Assessment Date

The date property tax liability is fixed. In Massachusetts, property taxes are assessed as of the January 1st prior to the fiscal year. Assessors determine the physical status of taxable real and personal property, its ownership, fair cash value and usage classification as of that date. By local option, the physical status of real property on June 30th is deemed to be its condition on the previous January 1st.

Boat Excise

An amount levied on boats and ships in lieu of a personal property tax for the privilege of using the Commonwealth's waterways. Assessed annually as of July 1st, the excise is paid to the community where the boat or ship is usually moored or docked for the summer months.

Commitment

An authorization to collect taxes, fees or other charges due a municipality. For example, the assessors' commitment of real estate taxes authorizes the collector to pursue and receive payment from property owners.

Exemptions

A discharge, established by statute, from the obligation to pay all or a portion of a property tax. The exemption is available to particular categories of property or persons upon the timely submission and approval of an application to the assessors. Properties exempt from taxation include hospitals, schools, houses of worship, and cultural institutions. Persons who may qualify for exemptions include service connected disabled veterans, blind individuals, surviving spouses, and persons over 70 years of age.

Fair Market Value

Fair cash value has been defined by the Massachusetts Supreme Judicial Court as "fair market value", which is the price an owner willing but not under compulsion to sell ought to receive from one willing but not under compulsion to buy. It means the highest price that a normal purchaser not under peculiar compulsion will pay at the time, and cannot exceed the sum that the owner after reasonable effort could obtain for his property. A valuation limited to what the property is worth to the purchaser is not market value. The fair cash value is the value the property would have on January first of any taxable year in the hands of any owner, including the present owner. (Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956)).

Fiscal Year

Since 1974, the Commonwealth and municipalities have operated on a budget cycle that begins July 1st and ends June 30th. The designation of the fiscal year is that of the calendar year in which the fiscal year ends. For example, the 2009 fiscal year is July 1, 2008 to June 30, 2009. Since 1976, the federal government fiscal year has begun October 1st and ended September 30th.

Full & Fair Cash Value (FFCV)

Interim Year Valuation Adjustment

State law requires that local assessed values reflect market value every year. Every three years, Bureau of Local Assessment (BLA) reviews and certifies that an individual community's assessed values meet the standard. In between these triennial certifications, a community should complete an annual analysis to determine whether an interim year value adjustment is warranted. Depending on market conditions and property value trends, adjustments may increase, decrease or leave values unchanged. If the overall assessed value of the community changes by 10%, up or down, BLA must be notified.

Levy

The amount a community raises through the property tax. The levy can be any amount up to the levy limit, which is re-established every year in accordance with Proposition 2 1/2 provisions.

Levy Limit

A levy limit is one of two types of levy (tax) restrictions imposed by MGL Ch.59 §21C (Proposition 2 1/2). It states that the real and personal property taxes imposed by a city or town may only grow each year by 2 1/2% of the prior year's levy limit, plus new growth and any overrides or exclusions. The levy limit can exceed the levy ceiling only if the community passes a capital expenditure exclusion, debt exclusion, or special exclusion.

Market Value

Fair cash value has been defined by the Massachusetts Supreme Judicial Court as "fair market value", which is the price an owner willing but not under compulsion to sell ought to receive from one willing but not under compulsion to buy. It means the highest price that a normal purchaser not under peculiar compulsion will pay at the time, and cannot exceed the sum that the owner after reasonable effort could obtain for this property. A valuation limited to what the property is worth to the purchaser is not market value. The fair cash value is the value the property would have on January first of any taxable year in the hands of any owner, including the present owner. (Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956)).

Mass Appraisal

Use of standardized procedures for collecting data and appraising property to ensure that all properties within a municipality are valued uniformly and equitably.

Massachusetts Association of Assessing Officers (MAAO)

A professional organization for individuals in the assessment profession and others with an interest in property taxation.

Motor Vehicle Excise (MVE)

A locally imposed annual tax assessed to owners of motor vehicles registered to an address within the community. The excise tax rate is set by statute at $25 per $1,000 of vehicle value. Owner registration and billing information is maintained by the State Registry of Motor Vehicles and is made available to a city or town, or to the Deputy Collector who represents it.

New Growth

The additional tax revenue generated by new construction, renovations and other increases in the property tax base during a calendar year. It does not include value increases caused by normal market forces or by revaluations. New growth is calculated by multiplying the assessed value associated with new construction, renovations and other increases by the prior year tax rate. The additional tax revenue is then incorporated into the calculation of the next year's levy limit.

Override

A vote by a community at an election to permanently increase the levy limit. An override vote may increase the levy limit no higher than the levy ceiling. The override question on the election ballot must state a purpose for the override and the dollar amount.

Parcel

A unit of real property used for the assessment of property taxes. A typical parcel consists of a plot of land (lot) defined by a deed and any buildings located there.

Personal Property

Movable items not permanently affixed to, or part of the real estate. It is assessed separately from real estate to certain businesses, public utilities, and owners of homes that are not their primary residence.

Property Tax Levy (See Levy)

The amount a community raises through the property tax. The levy can be any amount up to the levy limit, which is re-established every year in accordance with Proposition 2 1/2 provisions.

Property Type

The assessors in each Massachusetts municipality must place property in one of the following classes:

0 - Multiple-Use
1 - Residential
2 - Open Space
3 - Commercial
4 - Industrial
5 - Personal Property
6 - Forest (Chap 61)
7 - Agricultural / Horticultural (Chapter 61A)
8 - Recreational (Chapter 61B)
9 - Exempt Property

Within each class, the property can be assigned to any of several property types. Each type is assigned a three-digit type code consisting of the class number plus two digits that identify the specific type within a class. Property in classes 1 to 5 is a major consideration in the approval of tax rates.

Proposition 2 1/2

State law enacted in 1980 that regulates local property tax administration. Major provisions of this legislation are located in MGL Ch59 - Assessment of Local Taxes section 21C and relate to the determination of a levy limit and levy ceiling for each town.

Real Property

Land, buildings and the rights and benefits inherent in owning them.

Recapitulation, Tax Sheet

A document submitted by a city or town to the Department Of Revenue (DOR) in order to set a property tax rate. The recap sheet shows all estimated revenues and actual appropriations that affect the property tax rate. The recap sheet should be submitted to the DOR by September 1st (in order to issue the first-half semi-annual property tax bills before October 1st) or by December 1st (in order to issue the third quarterly property tax bills before January 1st).

Revaluation

The assessors of each community are responsible for developing a reasonable and realistic program to achieve the fair cash valuation of property in accordance with constitutional and statutory requirements. The nature and extent of that program will depend on the assessor's analysis and consideration of many factors, including, but not limited to, the status of the existing valuation system, the results of an in-depth sales ratio study, and the accuracy of existing property record information. Every three years, assessors must submit property values to the Department Of Revenue for certification. Assessors must also maintain current values in the years between certifications so that each taxpayer in the community pays his or her share of the cost of local government in proportion to the value of his property. (See also Triennial Certification.)

Tax Maps

Used to determine the location of the property, indicate the size and shape of each parcel, and show its relation to features that affect value. Maps also provide a complete inventory of all land parcels, helping to minimize the problems of omitted parcels and duplication of listing. Also referred to as assessor's maps.

Tax Rate

The amount of property tax stated in terms of a unit of the municipal tax base; for example, $12.26 per $1,000 of assessed valuation of taxable real and personal property.

Triennial Certification

The Commissioner of Revenue, through the Bureau of Local Assessment, is required to review local assessed values every three years and to certify that they represent full and fair cash value (FFCV).

Valuation

The legal requirement that a community's assessed value on property must reflect its market, or full and fair cash value