Taxable property values in Boston declined for the second consecutive year in fiscal 2011, although condominium and new commercial growth has helped mitigate losses, according to a new report.
Boston’s total taxable property value in fiscal 2011 is $86.8 billion, a reduction of $455.9 million, or 0.5 percent over the prior year, according to the Boston Municipal Research Bureau. The agency’s latest report provides an overview of property values and tax revenues as it relates to the economic health of Boston.
The drop in property values did not affect the city’s ability to increase the property tax levy by the full 2.5 percent plus new growth under the rules of Proposition 2 ½. Proposition 2½ is a state law which limits property tax increases by Massachusetts municipalities to 2.5 percent.
Boston’s net tax levy of $1.502 billion accounted for 62.3 percent of the city’s operating revenues this year, more than it did in 1980 when Proposition 2½ was approved. Net property tax revenues grew by $62.1 million or 4.3 percent in the last year. Since fiscal 2006, net property tax revenues have risen by $335 million or 28.7 percent for an average annual increase of 6.3 percent, in good part because of new growth.
Excluding condominium value, residential property value declined by $545.1 million, or 1.6 percent, in fiscal 2011. Condominium value increased by $829.3 million, or 3.6 percent, to $23.9 billion (due to new units) resulting in the overall residential value increasing by $284.2 million, or 0.5 percent, to $56.6 billion.
Business property value declined by 2.4 percent over the last year to $30.2 billion. New growth was strong this year, offsetting some reductions in this class. Business property, net of new growth, declined in value by 5.6 percent.
Under classification, business property accounted for 34.8 percent of the taxable value in the city yet paid 61 percent of the tax levy in fiscal 2011. Residential property represented 65.2 percent of the value but paid 39 percent of the total levy.
The aggregate value of 50 tower buildings dropped by $641.7 million, or 5.7 percent, from fiscal 2010 to fiscal 2011. The average tax per square foot of rentable space decreased by 0.6 percent, to $9.14 from $9.20. New class A development added $123.4 million of value to this category of properties in fiscal 2011.
The residential tax rate grew by 7.7 percent and the business by 5.7 percent over the last year.
The city’s average single-family tax bill in fiscal 2011 is $3,155, the third lowest among 19 area communities. If property were taxed without classification using a single rate, business property would pay $402.2 million less in fiscal 2011.
