Author: Municipal Finance Law Bureau
This month's Ask DLS features frequently asked questions concerning the valuation of real property following a fire or natural disaster. Additional guidance on supplemental assessment can be found in IGR-2021-12. Please let us know if you have other areas of interest or send a question to cityandtown@dor.state.ma.us. We would like to hear from you.
As a follow up from November’s edition of Ask DLS, concerning the new, local option, affordable housing property tax exemption, please note that the annual application for the exemption must be filed with the assessors no later than the due date of the first actual (not preliminary) tax payment for the fiscal year. The application deadline is not, as is presented in the November edition, “on or before April 1, or 3 months after the actual bills were mailed for the fiscal year, whichever is later.” Please reference the corrected version on our website.
Generally, can a municipality make a pro rata supplemental assessment or abatement on the value of certain improvements or damage to real estate after the January 1 assessment date?
Yes, if G.L. c. 59, § 2D applies. This statute governs the supplemental assessment of real estate subsequent to the January 1 annual assessment date. It creates limited exceptions to the general rule that assessments do not change after the January 1 annual assessment date, whether based on market conditions, the use of the property, transfer of title or other change in circumstances.
The assessor may make a supplemental assessment only if an occupancy permit is issued during the fiscal year and the new construction increases the parcel value by over 50 percent, exclusive of the value of the land. Further, pursuant to this statute, the assessor may make an abatement for certain damaged property. In such cases, the assessors must grant a pro rata abatement of the regular real estate tax assessed on a parcel whenever damage occurs due to fire or natural disaster after the applicable assessment date and a loss in value of more than 50 percent, excluding the value of the land, results.
What must a municipality do in order to obtain authority to make supplemental assessments or abatements?
Nothing. Section 2D is not a local option statute in the traditional mold of a municipal finance law where the relevant legislative body must vote to accept or “opt-in”. Instead, the default under the statute is that it applies, and a municipality must affirmatively opt-out of supplemental assessment for new construction or catastrophic loss or damage by a vote of the selectboard, town council or city council, with approval of the mayor if required by law. Accordingly, for municipalities that want to perform supplemental assessments post- January 1 in order to capture additional revenue based on new construction or to allow relief to a taxpayer affected by loss or damage due to fire or natural disaster, no action of the legislative body is required, and assessors should monitor such events locally through their planning, inspectional services and/or public safety departments.
A municipality’s decision to opt-out of supplemental assessment is effective only upon written notice to the Department of Revenue. DLS has a “Notice of Rejection” form a municipality should complete and submit in order to give effective written notice.
Can an assessor allow a full abatement of taxes attributable to fire or natural disaster?
Section 2D requires that a loss in value of real estate due to fire or natural disaster must be at least fifty-percent (50%) of the value, exclusive of the value of the land, to be eligible for abatement.
Accordingly, the minimum amount an assessor will abate is fifty-percent (50%) of the value of structures and other improvements affected by fire or natural disaster. The statute does not mention a maximum abatement of taxes on structures or other affected improvements, so the full value may be abated in the event of a total loss.
However, abatement is on a pro-rated basis from the time of the underlying event to the end of the fiscal year, calculated based on the number of days remaining in the fiscal year. Additionally, taxes on the land are not abated under Section 2D.
If the damage occurs between January 1 and June 30, a pro forma abatement of the next year’s real estate tax on the parcel must also be given, unless the community has adopted Chapter 653, § 40 of the Acts of 1989, where the damage would already be reflected in the following year’s regular property tax assessment. Similarly, if construction occurs between January 1 and June 30, a supplementary bill would be issued for the ensuing fiscal year.
Must a taxpayer apply for abatement of taxes based on catastrophic loss in order for abatement to be allowed?
Not necessarily, but it is recommended. A taxpayer has one (1) year from the time of the loss to apply for abatement if the assessor has failed to do so, but the assessor must abate if they are aware there has been a fifty-percent (50%) loss in value, as described above.
When an assessor has information that abatement for damage or destruction is warranted, they should work with the taxpayer to file an application in order to establish a formal timeline for appeal.
When a taxpayer has applied for abatement under Section 2D, they have the same appeal rights as any applicant for abatement.
Applicants should use the customary abatement application form. An appeal may be necessary if there is a dispute whether the reduction in value exclusive of the land is at least fifty-percent (50%). A severe weather event (e.g., hurricane, tornado, flooding) or geologic event (e.g., earthquake, landslide, erosion) may affect multiple properties in the same municipality with differing degrees of impact, so inspecting each property and considering all information relevant to the valuation of each will be necessary.
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Editor: Dan Bertrand
Editorial Board: Kasey Bik, Sean Cronin, Emily Izzo, Paula King, Lisa Krzywicki, Jennifer McAllister and Tony Rassias
| Date published: | December 7, 2023 |
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| Last updated: | October 9, 2025 |