Boston Property Values Skyrocket
Owners of commercial and residential properties all over the Boston area are facing higher property tax assessments. This goes along with the good news – bad news phenomenon of the relentlessly rising value of Boston real estate. In fact, the collective value of Boston residential and commercial properties has now soared to $100 billion, says the City Assessor’s Office. Next year, property owners will find tax bills in the mail, reflecting their higher assessments and the associated higher property taxes to be calculated in the beginning of 2015.
During the last decade, Boston’s real estate has been transformed by massive public and private developments that have changed the character of many areas of the city. The Seaport District, formerly a barren waste of parking lots, is now the site of new commercial office space. Downtown has become more accessible via the renovation of transportation corridors, such as The Big Dig and Rose Kennedy Greenway. New office and residential towers have risen from North Station to the Fenway. In the residential market as well, prices have shown a dramatic shift upwards. Condominiums in the heart of Boston sold for $830,000 in the fall of 2014, a price 16% higher than in 2013. In neighborhoods such as the Back Bay, prices are even higher. The average condo there is now valued at more than $1.4 million.
Higher Assessed Values Mean Higher Property Taxes
Higher assessments lead to higher property taxes, a potential deal-breaker for a business owner’s bottom line. An advocate for businesses in the Back Bay said tax hikes are one of many factors making it more difficult for smaller shop owners to continue operating there. Some properties, such as a pub on Boylston Street, have gone up in assessed value by as much as 81 percent, from $1.9 million to $3.5 million. This would add tens of thousands of dollars to the property owner’s annual tax bill. Small business owners predict hardships, since income may not rise proportionately to cover the increased tax expense. Owners of local businesses are concerned that higher costs will drive out all but large national and international chain stores, altering the character of neighborhoods and resulting in vistas of block upon block of banks and cell phone stores.
Mitigation Available To Reduce Tax Increases
Help is at hand. The state’s property tax law was drafted with foresight that such dramatic increases could happen. Under the law, any rise in a property’s total municipal tax levies is capped at 2.5% in any one year. Cities and towns must consequently adjust tax rates to even out increases over time and to prevent drastic rate hikes. In Boston, property owners are beginning to see some recourse to mitigate higher taxes. Boston’s assessing department has begun an outreach campaign to owners of property located in the parts of the city that have seen the most spectacular increases in values. Ronald Rakow, commissioner of assessing, has arranged for his staffers to discuss the new assessments with the affected property owners, although they will not be able to request adjustments until after the bills are sent out in early 2015. Overall, Rakow said, the value of the city’s real estate has risen 10 percent over last year. It is the largest percentage increase since 2007, when values jumped by 15 percent before beginning to nosedive during the Great Recession.
As experienced Massachusetts real estate attorneys, Pulgini & Norton can help you with all of your real estate legal needs. If you have a question regarding buying, selling, or financing a home, give us a call today at 781-843-2200 or contact our office online, and we can help legally clear the way for you.