I pay too much in taxes.
My house is not worth what the city assesses it for.
My real estate taxes are too high…..
Although these might be relevant points within your household, none of these arguments will be successful for you in filing for a tax abatement. Believe it or not, your city or town can assesses you for more than the current market value of your property as a basis of taxation and be correct in doing so. To find out how the New Hampshire property tax abatement system works; read on.
New Hampshire is unique in that it relies on property owners as the primary foundation of its tax base. This tax also called an ad valorem tax (Latin for “according to value”) which is a tax based on the value of property. One thing that we all know especially in the last seven years is that real estate values change from year to year; sometimes dramatically. So how is that your town can tax you based on a value that exceeds market value? The answer is an equalization rate. To understand what an equalization rate is and to find out what your's is click here.
The first step in filing for a tax abatement is to determine if you are over assessed. There are three ways to determine if you are being over assessed
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There are factual errors on your property assessment data card. Click here for more.
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Your assessment is disproportional to like properties within the municipality. Click here for more.
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Your property market value is higher than the equalized assessed value. Click here for more.
There are a few ways that you can prove market value. If you purchased or listed your residence for sale within the tax year; that transaction can be used to demonstrate market value as of April 1st. You also can list sales in your community within the tax abatement application. However, the most common method of proving market value is to retain a state licensed appraiser to conclusively prove the value within an appraisal report.
Proving market value can be difficult in a tax abatement process. Both courts and the NH Board of Tax and Land Appeals have placed significant reliance on the credibility of an appraisal with regards to proving market value of a property. The level of experience and competency of the appraiser also comes into consideration. If an appraisal report was not done specifically for tax abatement purposes (having an effective date of April 1st) the municipality may not accept the appraisal as a basis to grant an abatement.
Once the abatement is received by the municipality they have until July 1st to arrive at a decision. A municipality has three options come July 1st.
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Grant an abatement in whole or in part
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Deny the request for an abatement
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Make no decision at all
Discussion with your municipal tax assessor is encouraged up to and including the time period after the decision to grant or deny an abatement. In most cases data errors such as building size can be settled easily. Matters more complex such as validity of data contained within the appraisal report that is the basis of the abatement may require you working closely with the appraiser that you hired to produce the appraisal report.
If the municipality denied your request (or ignored your request) you have until September 1st to file an appeal. You may file an appeal with either the state Board of Tax and Land Appeals (BTLA) or Superior Court. You may file your appeal with either but not both.
It is up to you on where you wish to present your appeal; the BTLA or the court system. Both are very different.
The NH court system is best navigated by an attorney that will represent your case. Due to the expense of legal representation (for both parties) disputes regarding assessed value are typically reserved for cases where the difference of agreement is hundreds of thousands of dollars in assessed value. Commercial and industrial properties typically are heard in NH Superior Court where the differences in assessed value multiplied by a commercial tax rate can equate to $20,000 or more. In these instances it would be financially feasible to consider the Superior Court system to hear your case.
For residential homeowners where the difference of agreement on assessed value may be less than $50,000 to $100,000 the BTLA presents a more financially feasible option. It is more common for a homeowner to present their case in person at the BTLA. The BTLA also encourages mediation between the taxpayer and the municipality before a formal board hearing. For more information on the procedure to file an appeal at the New Hampshire Board of Tax and Land Appeals go to http://www.nh.gov/btla/appeals/propertytax.htm
Data errors on your property tax card can be rectified easily enough. Typically an abatement request that was denied and appealed to the BTLA or Superior Court involves a significant difference between property owner and the municipality. In most cases a professionally completed appraisal report will be the center of consideration for the municipality, the BTLA, or the Court. Having a professional and convincing appraisal as part of your abatement application may assist the parties involved at arriving at a correct decision.
To discuss the option of an appraisal report as part of your tax abatement application contact me directly by clicking on the ‘contact us’ page.