Property Tax

Ryan M. Borden
Practicing at Ford, McDonald, McPartlin & Borden in Portsmouth,
NH with a focus on bankruptcy representation of
trustees, creditors and debtors, corporate law and commercial litigation.

No. 2018-068
January 10, 2020

  • Whether the trial court erred in denying Plaintiff’s request for an abatement of real estate taxes for the 2014 tax year

Ventas Realty owned a 5.15-acre parcel of land in Dover containing a skilled nursing facility, two garages and a parking lot. In 2014, the City of Dover assessed the real estate at a value of $4,308,500. Ventas applied for an abatement of its 2014 taxes, which the City either denied or failed to act upon. Ventas then petitioned the trial court for an abatement pursuant to RSA 76:17 alleging the City unlawfully taxed the property in excess of its fair market value.

During a two-day trial, experts for both Ventas and the City testified. The parties stipulated to an equalization ration of 95.1%. Both experts testified that the property’s current use was its highest and best use and that the method for determining fair market value was the income capitalization method. The City’s expert also utilized the sales comparison and cost approaches to value the property. Both experts examined the same comparable properties and used similar definitions of fair market value.

Despite similar methodology, the experts came to opposite conclusions on value: Ventas’ expert valued the property at

$1,700,000 while the City’s expert valued it at $4,700,000. The City’s expert used both market projections and actual income and expenses for the previous three years to predict future net income. Ventas’ expert used the property’s actual income and expenses for the eleven months preceding the valuation date without any market-base adjustments. Even so, the experts’ estimates for projected gross income for the 2014 tax year were almost identical.

The difference arose in estimating the property’s 2014 projected operating expenses. Ventas’ expert, using the eleventh month look-back period, estimated expenses to be $9,936,601. The City’s expert’s analysis was more involved, analyzing comparable facilities’ expenses by category of expense, applying inflation based upon market trends and forecaster the expenses to be $9,016,402.

At trial, the trial court found that Ventas’ expert’s opinion was not accurate, that Ventas had failed to prove the property’s fair market value under the income capitalization approach and had failed to meet its bur- den of proof for abatement.

On appeal, Ventas argued that the trial court erred in crediting the City’s expert’s testimony and report over its own because the City’s expert’s methods were not accurate and its expert lacked necessary experience to make some of her qualifying decisions on projected expenses. Ultimately, Ventas’ argument was an attack on the credibility of the City’s expert.

The Court stated that credibility of witnesses is typically the province of the trial court. It held that even if Ventas was right that the City’s expert’s method resulted in a disproportionate tax burden, Ventas still lost. The trial court, while crediting the City’s expert, did its own analysis and ruled that Ventas had failed to meet its burden of proof and Ventas’ expert was not credible. Specifically, Ventas’ expert failed to explain how the property’s actual income and expenses compared to market rates, how it would per- form on the open market in 2014 and did not utilize comparable properties as evidence of market projections. The Court further held that Ventas’ expert’s failure to use more than eleven months of income and expenses to calculate fair market value was flawed.

Ventas also argued that the trial court erred in considering the 2015 sale to a relat- ed party as relevant for valuation. The Court held that the trial court did not consider that as evidence of value, but instead used it to determine credibility of Ventas’ expert.


Kevin P. Rauseo and Andrew J. Piela, Ham- blett & Kerrigan, Nashua, for the plaintiff. Walter L. Mitchell and Laura Spector-Morgan, Mitchell Municipal Group, Laconia, for the defendant.