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Councilor proposes chopping property taxes for homeowners; mayor agrees
By adamg on Tue, 12/06/2016 - 3:17pm
City Councilor Mark Ciommo (Allston/Brighton) and Mayor Walsh are proposing a measure that could save the average Boston homeowner $300 a year in property taxes, which the city says it can pay for thanks to the local construction and real-estate boom.
Under a measure sponsored by Ciommo last week, Boston would increase the tax exemption for people living in their own homes from 30% to 35% of their homes' assessed value. If approved by the City Council, the greater exemption would start being reflected in third-quarter tax bills sent out at the end of this month.
The proposal could particularly help homeowners in areas such as South Boston that have seen skyrocketing tax bills due to the rapid rise of property values in their neighborhood.
The announcement comes a day after Walsh proposed a measure that could make it harder for landlords to boot tenants for strictly economic reasons.
In a statement, Walsh said:
The City of Boston has been rapidly growing and expanding over the past few years and it's paying off. Whether they've lived here for decades or just moved in, our residents are the foundation to this vibrant and thriving city. We're happy to let Boston homeowners keep a little more money in their pockets come tax season with this increase in the residential exemption.
The mayor's office adds:
A historically strong business and real estate climate in Boston has resulted in record new tax revenue growth, producing $75.5 million in growth to the tax base due to new construction and properties being added to the tax base, the highest amount ever produced by the City in new growth.
The city gained the ability to increase its exemption in a bill signed last week by Gov. Baker. The mayor's office says the move will not cut city revenues, because the bill lets the city shift the reduction in homeowner tax burdens to other taxpayers, such as the owners of commercial and industrial property.
According to the mayor's office:
Increasing the residential exemption will keep Boston's taxes competitive with other communities, as the average residential tax bill in Boston will fall 38 percent below last year's statewide average of $5,247.
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Comments
Why?
Property taxes in the city are already at statewide lows, about $11/$1000 assessed. Add in the residential exemption and its something like $7-8/$1000.
I guess I shouldn't be complaining about more money in my pocket. But hopefully this isnt to the detriment of services and helping to alleviate the issues popping up of Boston becoming more dense.
The MBTA is breaking down once a week. Once quiet neighboorhoods are seeing major street level traffic from those trying to escape the chronically backed up highway systems at rush hour. Companies are moving in like rats in Haymarket on the weekends. People too.
It be a good time to use those funds to fix issues and build infrastructure to support people and buissinesses.
Wouldn't it be smart to use funds to support middle class property development instead of giving a break to those with wicked huge gains in equity in their home? They have options. Renters and the middle class that don't own do not.
Help
Maybe someone can shed some light on a question while we're talking about the exemption. Ive seen the 30% residential exemption, but I'm also noticing that people with the exemption in South Boston typically are paying around $4.60/$1000 (normal rate is $11/$1000.
Any idea why? Seems way over 30%
It isn't 30% of your property
It isn't 30% of your property value.
It is 30% of the average residential property in the entire city.
Everyone gets the same dollar amount exemption. Expensive houses get a smaller percentage, inexpensive houses get a bigger percentage. I pay $3.88/$1000 after the residential exemption, which is great.
Thank You!
That makes sense. So cheaper and smaller properties pay less, larger and higher assessed properties pay more.
Are you getting that from the
Are you getting that from the assessing website? They typically only show estimated taxes for the next half year. Right now I'm only seeing FY17Q1 and FY17Q2, which comes out to approx $3.70/$1000 in total.
Assessing website
You can look up prior fiscal year 2016, after using parcel number or the handy map to snoop around the neighborhood at assessed value and prior fiscal year tax / abetments / ect.
30% of average home price in the city
In Fiscal Year 2016, the residential exemption amount was $1,961.58, which was equivalent to a property value reduction of $178,325.
The $178,325 above is 30% of the average home price in the city and everyone who qualifies gets that amount taken off of their bill. So a condo assessed at $400k would pay the $11 per thousand on only $221,675. For next year we'll be able to go up to 35% of the average for that discount.
N/T
Thanks!
Even more generous than I though.
It's all a shell game
Taxes are figured out as follows:
there's a big pie
every year the pie gets 2.5% bigger plus a little more for new development (about 1.5-2.5% annually on top of the other 2.5%)
then they divide p the pie:
through a complicated formula (and a few odds and ends) - they figure out what commercial properties owe (usually about 60% of the aforementioned pie)
Residents owe the rest - about 40%. This proposal does ABSOLUTELY ZERO to lower taxes. It just makes some pay less and some pay more. Weirdly - it puts the screws to about 80% of residents as follows:
about 2/3 of residents rent - with no residential exemption those taxes sooner or later get passed on to renters
Those who own higher value properties (many of whom are not rich - but are long term residents living in highly gentrified areas)
finally - because it lowers taxes disproportionately on lower value homes - anyone buying a residence at the low end will have to bid up their home to get it because if you give people at that end of the market $1000 break on taxes - typically they'll just spend it on mortgage.
Hold on to your hats everyone - I've been off on the timing thanks to a Fed with a remarkably low marginal propensity to raise rates - but if they start raising next week - this could finally get ugly - especially if the Trump govt embarks on a round of deficit spending which will drive interest rates higher. We've gotten away with murder for years and passed the taxes on to the commercial sector. The chickens may (finally) be coming home to roost.
NPR
Just had the same story on, but said that the city isn't going to forgo the revenue but make up for it by raising rates on residential property owners who own more than 10 units.
No idea how they do that, but apparently that's their plan.
I don't foresee the hold on yet yer butts outlook on the Boston economy as you do. The region is very diversified, educated, and if anything not building enough for bussiness and residential demand. We even weathered the great recession much better than many areas of the country.
Higher interest rates and more taxes on renters will just drive even more people to looking for residential property in a market where rents are already significantly higher than mortgage interest payments. The lack/cap of housing will keep the regional economy from booming, and therefore busting.
Steady as she goes, with the not well to do getting pinched as they always have been the last 30 years.
Like a stopped clock
Sooner or later Stevil's predictions will be right.
More like a seismologist
You know the earthquake is coming - but figuring out when is very difficult, especially when the government can basically put their finger on the fault and make the earthquake not happen - at least for a while. Without unprecedented government (Fed) action and the lowest interest rates possibly in the history of the country - this would have occurred years ago.
Looks like the "while" is here. The mayor (and probably city council) get a heads up on what taxes will look like next year so they can take political action -like this. Sounds like they know trouble is afoot (plus it's an election year). It doesn't solve the problem - just shifts it around. In many cases it makes the problem worse.
One other problem. A broken clock is wrong for a long time, right for a short time and then wrong again for a long time. Depends on the speed and magnitude of interest rate changes -but the last time it happened the "tremors" continued for 5-7 years consecutively. So if interest rates pop and decline - no harm no foul. But if interest rates double or increase slowly - it's a whole new world of hurt for a lot of people.
The sad part is- the last time this happened the DOR wrote a white paper on how to prevent it from happening again - about 10 years ago. To the best of my knowledge literally not a single recommendation has been enacted.
What were the recommendations
What were the recommendations?
Don't recall specifically
This was about ten years ago, but I think a lot had to do with various circuit breakers limiting changes to sectors of taxpayers and individual taxpayers so that taxes wouldn't spiral upward as they can now.
Boston is at a statewide low?
Boston is at a statewide low?
I guess Cambridge doesn't exist with its $6.99/$1,000 with a 30% exemption . And it is going to $6.49 in FY2017.
https://www.cambridgema.gov/finance/propertytaxinformation/fy17propertyt...
I mean, look at the table at the bottom of the first page of their Tax Newsletter.
https://www.cambridgema.gov/~/media/Files/financedepartment/fy17property...
Well
I obviously overlooked the people's republic.
But, looking around the Boston metro area, and in nicer towns, Boston is considerably lower.
It's one of the reasons I'm here rather than over in Arlington or Somerville.
T breaking down only once a
T breaking down only once a week? What line are you on - I'd love to be on it. It's more like every day:)
The city doesn't lose any
The city doesn't lose any money. I think it is explained in detail by others but simply put if you get an exemption then someone else pays the bill.
When exemptions are doled out the tax rate gets hiked for EVERYONE, including those getting exemptions. Then then exemption is handed out to those who qualify. Which is why the exemption is an awesome deal for single family and condo owners who own and live, an ok deal for those who own two families and live in a unit, an eh deal for those who own triple deckers and live in one and a eck deal for renters who live in anything owned by someone who does not live in the building.
Ideally the exemptions should be used to encourage home ownership over investment properties but it is often used as a way to pacify those residents most likely to vote in city elections (single family and condo owners) and who are most likely to know their bills got lowers. Problem is that the euphoria or the drop only lasts for a year, until prices go up again. Then you have the same issue again.
Welp...
Man child is elected POTUS, Cubs win the series, my taxes are going DOWN, men are women, women are boys, you can be trans-racial, up is down, black is white...AMERICA IS GREAT AGAIN!
ERROR. ERROR. DOES NOT COMPUTE.
People wonder why there is a mental health issue in this country.
I DON'T KNOW WHAT TO BELIEVE ANYMORE!!!
((sobs))
What happens now with the Yes
What happens now with the Yes on 5 vote?
the CPA was much more about
the CPA was much more about getting the matching funds from the state (that we all pay into, regardless of whether we receive them) than increasing taxes on the residents.
Yes!
$300 extra dollars to sip on lattes, eat kale and style my man bun!
- The Original SoBo Yuppie
I like
"crap, it's almost election season" Marty Walsh.
I won't necessarily forget the Olympics, IndyCar, various sweetheart deals, federal investigations, etc. when its time to hand in that ballot, but I'll take this version in the short-term.
Never forget either that
On Friday, Dec. 2, 2016 around 5:30 PM when roads and intersections around Forest Hills, already jammed due to rush hour and the usual moronic box blocking, were shut down for nearly 10 minutes so that the mayor and friends could run a convoy of Boston trolleys through on their way to, I believe, Roche Bros. in West Roxbury.
And I thought initially all those police in the intersections were going to start handing out tickets to the box blockers...
Yawn
I remember back in either 2010 or 2011 the entirety of Washington Street from Forest Hills to the Square being closed on a Friday rush hour after a car and one of the motorcycles from St. Thomas of Readville's Christmas motorcade got into an accident.
I remember it because I was walking up Washington and suddenly noticed the lack of cars going down the street. This was not a serious accident.
My prediction, if Walsh loses in 2017, Mayor Jackson will be ruining your commute come 2018.
Clarification needed
So BPS needs money (or not, but certainly not over-funded), the public sector pensions are underfunded, etc... and yet we can cut taxes from residents, corporations and public institutions?
Um, what?
Also who cares what the statewide average tax bill is? Are we assuming that someone in Newton in a $1m split level ranch house and someone who owns a 100 acre farm in Conway are comparable to what someone 'should' be paying in Boston? Average tax rates are the only comp that makes sense IMO not bill average.
I totally agree
when you can squeeze more from taxpayers, why not do it? Just like in Animal Farm.
Good for the mayor
Surprised to see people spewing sour grapes about this, just goes to show you really can't please everyone. Schools won't be any more underfunded than they already are. And the little guy deserves a break for once.
The little guy?
The little guy is the renter, who won't be impacted by this.
Also, didn't we just vote to increase our tax bills with the Community Preservation bit, but now we need relief? It just seems like incoherent policy.
It's also magical thinking to claim that lowering tax bills across the city won't have an impact on the city budget.
I think one of the goals of
I think one of the goals of the exemption is to change more housing stock from being investor-owned to being owner-occupied. It doesn't hurt renters as much as it hurts renting.
The CPA was more to finally
The CPA was more to finally get us the matching state funds we already pay into, plus the money is specifically earmarked. There are also plenty of little guy property owners from owner occupied 2/3 families to single families an condos.
And the little guy deserves a break for once.
Cool, so when are those T fares going down?
T Fares will go down
when service reaches a 93+% on time arrival. These things happen in pairs.
Factoring in "sanctuary" losses?
Does this take into account the $250 MM the City might lose from declaring itself an illegal immigrant sanctuary?
Wait, what?
I'm all for the tax break, but now Walsh wants to prohibit landlords from refusing to renew the lease unless the tenant is a deadbeat who hasn't paid rent in years and finally burned the house down? Last time I checked this is USA, not USSR - we can do whatever the hell we want with our property as long as we fulfill our contractual obligations (i.e. lease.) I have a funny feeling we'll have a republican mayor if he keeps up this BS.
Maybe check with the doctor about that feeling
Marty might not keep his job but more people rent in this city than own. Maybe you'd feel better in Weston.
Renter right laws are popular for good reasons and that's not about to change.
You haven't been around Massachusetts long, have you?
But if you rent it out you come under a lot of laws. Good laws, laws that make me proud to be from this state. Laws that protect tenants better than just about any other state in the country. And that's been the case for a while. So, yes, I suppose you can't do whatever the hell you want with your property, but you have to deal with the consequences. You have certain duties owed for decisions you make with it, especially decisions involving renting it out.
(I haven't read the law yet so I don't know if I agree with it, but even without it your point would still be wrong.)
Also, we can do good things for owners but not renters?
A Republican Mayor?
The GOP can't even field candidates for state rep in Boston, so don't hold your breath.
I'd settle for a competent
I'd settle for a competent nonpartisan AG only interested in being the AG.
/Hell will freeze over
Stickin' it to the investors, I guess
I like the idea that people buying million dollar condos solely as an investment have to pay more and I get a break. That's cool.
On the other hand, isn't there a rainy day fund that could use a few bucks or something that's broken now that needs fixing?
There is...
But it's my (and every other taxpayer's) rainy day fund.
Apples and oranges
The City is going to make up for it by charging more at South Boston Waterfront parking meters, 5 cents for shopping bags and all the fines for going over 25 mph in the City.
Not shopping bags
That fee stays with the stores.
Blocking the box
I know it's futile, but I bet the city could bring in a billion in new revenue if they enforced blocking the box.
Has anyone in power ever muttered that, or is it akin to chanting Bloody Mary?
What goes up...
Didn't the City just increase property taxes last year? (Yes, it did.)
So then a year after raising property taxes because of some revenue need of the city they are proposing an exemption that will reduce the revenue that the city gets.
Can they just figure out what they need??
Don't know if that's accurate
I don't believe the city increased property taxes, last year. According to the city's assessor's website, the FY2014 tax rate was $12.58 per $1,000 of assessed value, the FY2015 tax rate was $12.11 per $1,000 of assessed value, and the FY2016 tax rate was $11 per $1,000 of assessed value.
Your property taxes went up due to an increase in assessed value, most likely. Your home is worth more, according to the city.
This is how the city is able to say "taxes went down" when for the vast majority of homeowners, they actually went up.
#aintitgrand
Mine went down
Though I know Stevil would have some tortured grassy knoll explanation of why they really didn't.
Actually mine might have also
Really about the same. It happens - but probably due to the commercial taxes going up (more due to lower interest rates than anything else). Once those interest rates spike - the process reverses. The benchmark 10 year bond that serves as an index for many mortgages bottomed at close to 1.3% earlier this year. They've almost doubled to about 2.4% since - slightly higher than this time last year. You don't want to know what happens if they double again (although even I don't think that will happen unless Trump out-trumps Trump in borrowing or some other financial calamity strikes the US).
Property Taxes
This is welcome news. I hope it becomes a reality.