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The assessed value (or assessment) is the value of property to be used for local taxation, as determined by the Assessors according to Massachusetts law and regulations set by the Commissioner of Revenue.
Valuation in Massachusetts is based on "full and fair cash value," the amount a willing buyer would pay a willing seller on the open market. Assessors must collect, record, and analyze a great deal of information about property and market characteristics in order to estimate the fair market value of all taxable properties in their communities. Properties such as churches and educational institutions are also valued even though they are exempt from taxation.
Assessors first inspect each property to record specific features of the land and building(s) that contribute to its value. Size, type, and quality of construction, number of baths, fireplaces, type of heating system - all are examples of the data listed on individual property record cards before the valuation process can begin.
Finding the full and fair cash value or market value of a property involves discovering what similar properties are selling for, what the property would cost today to replace and what financial factors, such as interest rates, may be affecting the real estate market.
Valuation techniques for commercial and industrial properties also include analysis from an investment point of view, since the purchase price the buyer is willing to pay depends in part on the return he expects to receive.
The Assessor does not create value. Rather, he/she has the legal responsibility to discover and reflect the changes that are occurring in the marketplace.
Since assessments must be set at market value, rising real estate values in the community will be reflected in generally higher assessments. All properties, however, do not change in value to exactly the same degree. Many factors influence values and the value of some properties – for example, those with water views may increase more rapidly than others.