Helpful Words and Terms
Like every industry, the property tax world has its own "language" used by the people who handle property tax matters every day. To these professionals, the words and terms are second nature. But for the average homeowner and taxpayer looking to reduce their property taxes, these words and terms are completely foreign. Here's our list of the most common terms you're likely to come across as you file for a property tax refund, with definitions and examples.
Don't see a word, term, or phrase listed here that you have a question about? Contact Us and we'll be happy to explain it to you. We may even add it to our site!
- Assessed Value
- Assessor/Local Taxing Authority
- Equalization Ratio
- Equalized Assessed Value
- Property Tax Refund/Property/Tax Abatement
Assessed value is the value of a piece of real estate/property for the purposes of real estate taxation.
Every year in New Hampshire, each piece of property is allocated an assessed value by their local taxing authority on April 1 of each calendar year. The assessed value should equal the market value of the property as of April 1 (the date of assessment). The local taxing authority then multiplies the assessed value by the municipal tax rate to calculate the amount of property tax each property owner/taxpayer should pay.
Sometimes, local taxing authorities get the assessed value of a piece of property wrong. Generally, these properties are over-assessed; meaning, the city/town states the property is worth more than the actual market value was on April 1. This means that for those property owners/taxpayers, they are paying more than they should in property taxes. A property tax refund application asks the local taxing authority to reduce the assessed value of a piece of real estate, which in turn lowers the real estate taxes.
A property assessment is the value or amount attributed to a piece of real property by a local taxing authority.
Assessments can also be called "assessed value."
Assessor/Local Taxing Authority
An assessor-- also known as a property assessor, tax assessor, or real estate assessor-- is a local government official and/or contractor who determines the assessed value of each property within the municipality (town or city) for local property tax purposes.
In New Hampshire, some of the larger cities-- like Concord and Manchester-- have assessors specifically for the city that are full or part time employees. Smaller cities and towns often use third-party assessor contractor services (such as Avitar Associates) to handle assessing on the town's behalf. This means that a lot of the assessments that occur in New Hampshire aren't even done by local towns- they can be calculated by large companies that are sometimes many states away from New Hampshire.
Because there aren't a lot of traditional "assessors" on staff for New Hampshire municipalities, we like to use the term "local taxing authority." This broad terms covers any and all municipal officials, agents, or contractors that take part in the assessment and taxation process.
The vast majority of property owners in New Hampshire applying for property tax refunds do so on the basis of being assessed in a disproportionate manner. In the context of real estate taxes, a property may be assessed disproportionately if it is not being assessed in the same manner as other properties.
Each year, the Department of Revenue Administration (DRA) creates equalization ratios for each New Hampshire municipality. The DRA produces these ratios by examining all sales in every municipality in New Hampshire for the six months prior to April 1 (the date of assessment) and 6 months after April 1.
In essence, equalization ratios are ratios applied to assessed values to create an "updated" market value assessment of each property. This is useful because in New Hampshire, most municipalities only revalue properties once every five (5) years. The equalization ratio allows municipalities to "refresh" the value of all properties in between revaluation years by multiplying the equalization ratio to the existing assessed value.
It's important to note that the DRA is only required to produce equalization ratios by May 1 of each calendar year, which is more than a full year after the original assessed value is released by municipal assessors. This means that applicants for property tax refunds always need to rely on the previous year's equalization ratio for municipal applications.
Confused? Don't worry. Our automated system extracts and applies equalization ratios to all assessed values automatically, so our users don't need to know all the details. But we know that assessors like to throw this term around a lot, so we thought we'd at least give a brief introduction.
Equalized Assessed Value
Equalized assessed value is the value of the assessed value of a piece of property applies to the equalization ratio. In theory, the equalization ratio should equal market value of the subject piece of property for taxation purposes.
Equalized Assessed Value = Assessed Value ÷ Equalization Ratio.
Confused? Don't worry. Our automated system takes care of generated your equalized assessed value automatically. But we know assessors like to discuss equalized assessed value, so we thought we'd give you a brief introduction.
Property Tax Refund/Property Tax Abatement
Property tax refund is our term for property tax abatement. They are the same thing, based in the same statutes and laws, but we think "property tax refund" is a better term to describe the process.
A property tax refund is a refund to a property owner or taxpayer for overpaid real estate taxes. Property owners/taxpayers can qualify for property tax refunds for "good cause shown," which includes:
- Proof of a disproportionate assessment;
- Error in property information; and
- Poverty/extreme inability to pay property taxes.
The property tax refund procedure is established primarily under RSA 76:16, but there are also other related statutes and rules that govern property tax refunds.
RETaxRefund.com's packages allow users to determine whether they are good candidates to apply for property tax refunds; and help users prepare, submit, and negotiate their own property tax refund applications without the use of expensive experts and consultants.
A revaluation is the re-estimation of the value of all properties within a town or city using standard appraisal methods to establish "new" and "accurate" opinions of value of each piece of real estate. Under New Hampshire law, revaluations must occur in each municipality at least once every five (5) years, although larger cities-- such as Concord-- perform revaluations of all properties on an annual basis.
Valuation is the process of determining the value of a piece of real property for property tax purposes. In the context of real estate, valuation is performed in an official capacity only by licensed real estate professionals, i.e. appraisers.
There are many methods of valuation; however, the most common method of valuation for residential properties is the comparable sales approach. Under this approach, market value is estimated using the sales prices of other similar properties that have recently sold.
- retaxrefund-store Admin