City of Boston property tax rates 2010 will mean higher bills for many homeowners

*** IF YOU ARE reaching this page in search of information on the new law requiring condominium associations in the Commonwealth of Massachusetts to make minimum corporate tax payments each year, go to this story: Worst Tax, Ever ***

You might be holding out hope that, due to an economic slowdown of the size we haven’t seen for almost 80 years, the value of our homes might be at least slightly less than they were three years ago and that your property taxes might be going down to reflect this. No. And, no.

The city of Boston recently sent out valuation notices to homeowners. While the city says, “Many homeowners saw a decline in value,” it’s just as true that many homeowners saw increases in value (our condo’s value went up ten percent, for example). Overall, the assessed value of single-family homes in the city dropped 5% and condos dropped 2%, but several neighborhoods saw high-single and even double-digit drops in values while properties in the downtown Boston neighborhoods increased.

The Boston Globe covered this in a recent article:

In the past year, the median assessment of single family homes dropped 13 percent in East Boston to $221,450, 12 percent in Mattapan to $220,700, and 10 percent in Roxbury to $219,900. There were some relative bright spots: Median assessments increased 1 percent in both Jamaica Plain and South Boston, to $514,900 and $349,500, respectively.

During the same time, the median assessment of condos dropped nearly 15 percent in South Dorchester to $178,500, 11 percent in East Boston to $183,100, and 10 percent in Mattapan to $158,400. Assessments rose 3.7 percent to $441,800 in the South End, 2.3 percent to $492,200 in the Back Bay and Beacon Hill, and 2.5 percent to $275,300 in the Fenway.

(The downtown Boston neighborhoods ‘subsidize’ the other neighborhoods because of their higher valuations and because when it comes to city services, they are ‘donors’, paying more in taxes than they receive.)

There’s two parts to how much property tax you’ll have to pay. There’s the assessed value of your property and there’s the city’s residential property tax rate.

The city announced this past week that the residential property tax rate will increase from $10.87 to $11.88 per thousand dollars of valuation.

Tough situation for many Boston homeowners but little they can do to complain.

You might try to plead your case before the city’s Assessing Department. Appeals must be in before February 1, 2010, I believe.

The following is the official press release from the City of Boston:

* City of Boston sets tax rate for Fiscal Year 2010 *

* The City of Boston is prepared to submit to the State for certification its tax rate for residential and commercial properties for Fiscal Year 2010. Reductions in the City’s other revenue sources – most notably state aid – leaves the City little choice but to increase the property tax levy by the maximum allowed under Proposition 2 ½. As a result, for the first time in three years, the average bill for a single family home is expected to increase by $173 from $2,762 in FY 2009 to $2,935 for FY 2010. However, this is still lower than in 2008 when the average bill was $2,949.

* Fiscal Year 2010 Tax Rate Information *

* The Fiscal Year 2010 tax rate for residential property is expected
to be $11.88 per thousand dollars of valuation. The rate for
business properties is expected to be $29.38 per thousand. Fiscal
Year 2009 rates for residential and business properties were
$10.63 and $27.11, respectively. The rates are subject to
certification by the Massachusetts Department of Revenue.

* The total tax levy is $1.465 billion, an increase of $65 million
over last year. $29.6 million of this growth is the result of new
construction and properties being added to the tax base. The
remaining $35 million is the full 2.5% increase allowed under
Proposition 2½.

* State Law requires Massachusetts cities and towns to revalue all
properties every three years. Boston has revalued all properties –
over 148,000 parcels and personal property accounts – for Fiscal
Year 2010. The effective date established by State law for the
Fiscal Year 2010 assessments is January 1, 2009. Assessments
reflect the market conditions as of that date.

* The assessments for many homeowners have declined. However,
reductions in the City’s other revenue sources – most notably
state aid – leaves the City little choice but to increase the
property tax levy by the maximum allowed under Proposition 2 ½, as
mentioned above. The reductions in assessments combined with an
increasing levy will require an increase in the tax rate to
compensate. As a result, the average single family tax bill will
increase by $173, from $2,762 in FY09 to $2,935 in FY10 for
taxpayers receiving the residential exemption.

* Residential taxes in Boston remain extremely competitive: the
average residential tax bill in Boston is 30% below last year’s
state wide average of $4,250.

* The residential exemption, available to taxpayers whose homes are
their principal residence, will save qualifying taxpayers
$1,486.07 off their tax bills.

* The City’s total assessed value is $87.3 billion, a decrease of
3.5% from last year.

* The 3rd quarter tax bills containing the new assessments and tax
rates will be mailed at the end of December, after the rates have
been certified by the Massachusetts Department of Revenue. The 3rd
quarter bill is due February 1, 2010.

Related posts:

1. Boston: it’s not Worcester (where property values continue to drop)
2. Deadlines & commitments: Today is tax abatement deadline date in Boston
3. City releases property tax scofflaws list
4. Mortgage loan delinquencies rise but at lower rate, MA does well
5. When you look at higher and lower condo prices, take heed