City Hikes Property Tax Rate by 11.8%

The City of Boston has announced a property tax rate increase for fiscal 2010 with the residential rate going up by 11.8% and the commercial rate up by 8.4%. The tax rate is one of the two factors that will result in total property tax bills. The second factor is the property’s assessed value, which is surveyed every three years. Residents should have received a recent notice of the change in their assessment. Overall, the City’s assessed values went down by 3.5% although certain areas have increased. Anecdotal reports show a mix of increases and decreases in the North End/Waterfront area, although several properties on the waterfront saw their assessments go up substantially.

The rate will increase from $10.63 per $1,000 in assessed value to $11.88. The commercial rate for businesses will also increase from $27.11 per $1,000 of assessed value to $29.38.

The City blamed the increase mostly on a decrease in State aid and said the rate is the first increase in three years. The increase will increase the total tax by $65 million to $1.465 billion. Bills will be sent out in a few weeks with a due date of February 1, 2010.

Below is the press release from the City.

*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.