Idea #378 – Supplemental Tax Assessment on New Construction

Report Status: Fully Reviewed

Researched by: Matthew Gasbarro

Idea Text

Implement new state law SUPPLEMENTAL TAX ASSESSMENT ON NEW CONSTRUCTION allowing assessors to update tax assessment of substantially improved homes when granted an occupancy permit rather than wait for next Jan 1 revaluation.

Other ideas included in this report

  • None

Idea intent

The turnaround time between when a parcel receives its occupancy permit from new construction to the January 1 new assessment date prohibits the Town of Belmont from receiving tax revenue of its fair market value until some months later. Enacting the guidelines set forth in the Informational Guideline Release (IGR) No. 21-12 is an opportunity to receive the increase in tax revenue from new growth ahead of the January 1 revaluation date.

Weighted Final Score: 57 (Financial Impact: 4, Operational Impact: 0, Time Scale: 4, Ease of Implementation: 5)

Background Information

In May 2021 the MA Bureau of Municipal Finance Law published an Informational Guideline Release (IGR) No. 21-12 concerning MA G.L. c. 59, § 2D titled Supplemental Tax Assessment on New Construction. These guidelines provide cities and towns pertinent information to implement pro rata tax assessments on parcels whose value has increased by over 50%, excluding value of land, upon issuance of an occupancy permit following new construction or improvements. The statute applies automatically and requires no further action by the Town of Belmont to enact.

Recommendations

  • The Belmont Assessors Office implement prorated tax assessments on qualifying parcels immediately.

  • The Belmont Assessors Office identify current qualifying parcels (those issued or soon to be issued occupancy permits) and conduct the necessary assessments for valuation update and proceed with issuance and collection of pro-rated taxes.

  • The Belmont Assessors Office devise a process to identify and track future qualifying parcels prior to next January 1 tax assessment deadline and be prepared to conduct the necessary assessment once occupancy permit has been issued.

Next Steps

  • Communication of IGR 2021-12 was sent to the Board of Assessors on July 25, 2021 to the Assessor’s Office to seek status of implementation. The SCIG committee met with the Board of Assessors on November 19, 2021. Implementation is expected in FY22.

  • The Select Board should request periodic check ins with the Board of Assessors for status of implementation.

Further Reading