For the first time in three years, taxes for single-family homes in Boston are set to rise as the city tries to make up for declining property values, officials said today.
The average bill will increase by $173 in fiscal 2010, and the tax hike will be reflected on bills residents receive this month. The overall bill for the average home, now valued at $372,138, will climb to $2,935 for those who live in their homes and receive the residential exemption of $1,486.
"With the reduction in state aid, the property tax is critical in maintaining city services," said Ronald W. Rakow, commissioner of the city's Assessing Department during an interview in city hall.
By state law, the city can raise its tax levy, the total revenue from property taxes, by 2.5 percent each year. Over many years, as home values increased, it has done this by actually reducing its tax rate.
The city's total tax levy in fiscal 2010 will be $1.5 billion, about $65 million more than last year. About $30 million of the growth is the result of new construction and properties added to the tax base. The remaining $35 million will come from the 2.5 percent increase.
State law requires cities and towns to "revalue" all properties every three years. Boston has revalued its 148,000 parcels for fiscal 2010, based on their market value as of Jan. 1, 2009.
The value of many properties has likely fallen since then, Rakow said.
The falling values have hit multiple-family homes the hardest.
Since fiscal 2007, the median value of the city's three-family homes has plummeted by more than 30 percent, and two-family homes have dropped by 27 percent. Over the same time, single-family homes have fallen 13 percent in value and condominiums have declined nearly 8 percent.
From fiscal 2009 to 2010, single-family property values in the city dropped 5 percent, two-family values dropped 9 percent, while three-family values dropped 12 percent. Condos fared relatively well, falling only 2 percent.
But some parts of the city have been hit worse than others.
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.
Despite the property tax increase, the average residential tax bill this year in Boston is 30 percent below last year's statewide average of $4,250, Rakow said.
By comparison, the average property tax bill last year for a single family home was $10,064 in Brookline, $8,043 in Newton, $5,720 in Cambridge, $5,203 in Dedham, and $3,099 in Somerville, Rakow said.
Boston residents will receive the bills for the third quarter of fiscal 2010 at the end of December. Payment is due on Feb. 1.
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