2400 Property Owners File For Tax Abatements

Thursday, July 12, 2012

Sandy Meindersma, GoLocalWorcester Reporter

Nearly 2400 city property owners have filed for tax abatements, according to assessor William Ford. That figure is 5 percent of all property owners in the city.

Applications for abatement for the fiscal 2012 year were due on June 25, 2012, and Ford said that he has received 1620 residential applications, 756 commercial applications and applications from 56 mixed use property owners. Applications that are postmarked by the June 25 deadline will be accepted. Fiscal 2013 valuations will be issued sometime in the third quarter of the fiscal year, usually in January.

The 756 commercial properties represent 15 percent of the city’s commercial properties.

“Every one of the largest, most significant property owners has appealed,” Ford said.

In addition, Ford said 150 of the city’s business owners have filed for personal property tax abatements.

Ford said that he was not surprised by the number of abatement requests, in light of the large changes in commercial property values.

"In a cyclical revaluation when you have consistency, there's not that many, but where I come from in New York, there are no cyclical revaluations, and there we usually have about 5 percent who apply for an abatement," Ford said.

Abatement Process

Ford said he is currently reviewing abatement applications and re-inspecting properties.

“We are in talks with the attorneys of some of the property owners and some of them have hired professional appraisers,” Ford said. “I tell the appraisers ‘determine the fair market value. We did 4800 commercial properties, so the rental estimate and vacancy rate may be different on that one property than what we used.”

Ford said that once an appraiser has completion his evaluation, Ford expects to negotiate a revised valuation.

Just Beginning the Process

Ford said that 458 properties have been adjudicated. 239 abatement requests have been approved; 219 have been denied. Ford did not have the breakdown on residential vs. commercial.

“For some of these properties, it’s going to take three to five years to resolve the issue,” Ford said. “If their request is denied, they can appeal it to the Appellate Tax Board.

Ford said that property owners must have paid their property taxes on time in order to be eligible for an appeal with the Appellate Tax Board.

“If they incur any interest charges from the city, then they are not entitled to a hearing with the Appellate Tax Board,” Ford said.

Overlay Account Covers Abatements

In the event that a property owner’s abatement request is approved, the city’s overlay account refunds the overpaid property taxes to the property owner.

The account, which is a standard line item in all Massachusetts’ municipal budgets, pays for property taxes that are exempt (i.e. senior citizen and veterans programs) and abated.

“There’s $5 million in the overlay account right now,” Ford said. “We funded it pretty generously, in anticipation (of the revaluation), and many of the accounts will take years to settle, especially if they have to go to the Appellate Tax Board, which can take three to five years.”

Ford said he would be making a more complete presentation on the abatement process status at the next City Council meeting.