Tax abatement season is here. Hinckley, Allen & Snyder LLP’s experienced team assists property owners and other tax payers throughout New England in reducing their real estate taxes. This Real Estate Alert summarizes some imminent filing deadlines in Rhode Island, Massachusetts, New Hampshire, and Connecticut. It also includes several examples of the positive results Hinckley, Allen has achieved for our clients.
RHODE ISLAND
Taxpayers still have time to file a municipal appeal of 2011 taxes. The deadline for filing is ninety (90) days after the date that the first payment of 2011 taxes was due (usually around September 1st). The appeal gets filed on a statutory form provided by the city or town and is decided by a municipal hearing board. To preserve the right to file a judicial appeal of the hearing board’s decision on 2011 taxes, taxpayers must file certain pre-appeal paperwork in the first quarter of 2012 (i.e., a Notice of Intention to File an Account, on or before January 31, 2012; and an Account, by no earlier than March 1, 2012 nor later than March 15, 2012). The only exception to the requirement of filing a Notice of Intention to File an Account and the Account would be where: (a) the municipality where the real estate is located is going through a full reevaluation (every ninth year) or a Statistical Update (every third year) (check with your local assessor as to whether either is taking place); and (b) the Taxpayer’s real estate has been valued in excess of the value at which it was assessed on the last preceding assessment date. If those two conditions are met, the filing of a Notice of Intention to File an Account and the actual Account are not required for filing a judicial appeal. If the Taxpayer has not received a statement of value by January 31, 2012, then out of an abundance of caution a Notice of Intention to File an Account should be filed. The filing deadlines are strict, and if a taxpayer fails to file locally, or files late, then its appeal rights are forfeited.
MASSACHUSETTS
Taxpayers still have the opportunity to challenge their real estate tax assessments for Fiscal Year 2012 (July 1, 2011 – June 30, 2012). Tax abatement applications need to be filed within thirty (30) days of the mailing date of the actual tax bill (the actual tax bill is generally the third quarter tax bill in jurisdictions that assess taxes on a quarterly basis). January 1st is the typical date most third quarter tax bills are mailed in Massachusetts. Therefore, under M.G.L. Chapter 59, the majority of abatement applications must be filed with local assessing departments on or before February 1, 2012. In jurisdictions in which taxes are assessed on a semi-annual basis (such as Cambridge), this date will vary (for instance, Cambridge this year has a November 21, 2011 filing deadline for Fiscal Year 2012). In order to preserve your abatement and appeal rights, the taxes must be paid in their entirety for the current and all prior periods for Fiscal Year 2012.
NEW HAMPSHIRE
Taxpayers still have plenty of time to challenge their real estate tax assessments for Fiscal Year 2011 (July 1, 2010 – June 30, 2011). An Abatement Request must be filed locally on or before March 1, 2012 in most instances. Required forms are available at the local assessing office or printable from most towns’ web sites. If you are unsatisfied with the local decision, then you may file an appeal with either the Board of Tax and Land Appeals or the County Superior Court; but not both. In general, appeals must be filed no later than September 1, 2012 or eight (8) months after the final tax bill, whichever is later. The filing deadlines are strict, and if a taxpayer fails to file locally, or files late, then its appeal rights are forfeited.
CONNECTICUT
Taxpayers (including certain lessees under recorded leases) may seek abatement of their real estate property taxes by filing an appeal with the Board of Assessment Appeals (“BAA”) or Board of Tax Appeals (BTA) for the municipality in which the real estate property is located, on or before February 20, 2012. The filing of an appeal to the BAA/BTA is a mandatory first step to the abatement process. The appeal addresses the valuation of the property as of the last revaluation. If the Taxpayer fails to file an appeal to the BAA/BTA or files the appeal beyond the deadline, its appeal rights may be lost. Forms for filing the appeal to the BAA/BTA should be obtained from the municipality. Appeals from decisions of the BAA/BTA may be brought to the Connecticut Superior Court within two months from the date that notice is mailed of the action taken by the BAA/BTA. Real Estate Property Tax appeals under Sec. 12-119 (where the taxpayer is claiming the property tax was illegally assessed, manifestly excessive, and arrived at by disregarding the provisions of the statutes for determining the valuation of the property) may be taken to the Superior Court within one year from the date the property was last evaluated for purposes of taxation.
REPRESENTATIVE MATTERS
40% + reduction; Rhode Island. HAS represented a large landowner in Rhode Island who owned an assembly of center city parcels assessed at more than $50,000,000. HAS challenged those assessments both administratively and in Court. After a contentious dispute with the City, HAS succeeded in (1) reducing the valuations by more than 40%, and (2) having a bill for $7,000,000 in back taxes declared illegal.
30% reduction; Connecticut. Hinckley Allen successfully handled a tax abatement proceeding for a client which owned three residential properties in Litchfield County, Connecticut. In a townwide property revaluation, the taxing authority determined the aggregate fair market value of the three properties to be $7.62 million, resulting in an aggregate assessment of $5.53 million. Hinckley Allen appealed the assessment to the local Board of Assessment Appeals, which granted only a minimal reduction in the assessment. Hinckley Allen then appealed to the Connecticut Superior Court. Working in tandem with a local appraiser, we reached a pre-trial settlement under which the town stipulated to a fair market value of $5.49 million and a corresponding assessed value of $3.84 million; a 30% reduction in the proposed assessment.
15% reduction; Connecticut. This year, we concluded a successful tax appeal on behalf of a client which owned an assisted living facility in Hartford County, Connecticut. The municipality valued the property at $15,914,000 which translated to an assessed value of $11,140,000. We argued that the assessed value improperly included the value of business intangibles. Only real property is subject to taxation at the municipal level and therefore the value of business intangibles and furniture, furnishings, and equipment may not be included in a property’s assessed value for real estate tax purposes. After hearing our arguments, the court recommended, and the parties agreed, to a settlement reflecting a 15% reduction in the total assessment.
25% reduction; Massachusetts. HAS successfully handled a tax abatement appeal for a client which owned an office building in northern Massachusetts. Our client purchased the building at an attractive price in an arms length transaction. We were able to use the transaction to secure a 25% reduction in the assessed value of the property. This made a good deal even better.
25% reduction; New Hampshire. This year, HAS successfully handled a tax abatement appeal for a continuing care retirement community in central New Hampshire. Due to some improvements made to the property, the assessor increased the assessed value of the property by $6,000,000. We argued that many of the improvements constituted deferred maintenance and did not result in an increase in the value of the property and that some of the improvements were personal property and not subject to taxation. The municipal appeal board agreed with much of our claim and reduced the proposed new assessment by $1,500,000 or 25%. This was particularly important for the client because many of the improvements at issue will be made in future years for other portions of the property