A Boston metropolis councilor needs to jack up the property taxes for big and luxurious condominium buildings, whereas decreasing the annual tax invoice for householders and small landlords.
Councilor Brian Worrell — who represents Mattapan, Dorchester, and elements of JP and Roslindale — is out with a plan that will greater than double the tax charge on massive condominium buildings.
Worrell says his proposal would assist drop the yearly tax invoice for the common Boston house owner and small landlord by almost $1,000.
His plan comes as town reportedly heads towards a $1.7 billion funds shortfall within the subsequent 5 years, as empty workplace buildings have industrial values plummeting.
“My top priority is to make Boston more affordable, and this proposal does just that, lowering costs for our workforce and homeowners, rewarding affordability in large buildings, and providing tax stability for our office sector,” Worrell mentioned in an announcement.
Worrell’s proposal would introduce an inexpensive housing tax exemption for big condominium buildings.
Any will increase to property tax payments for company house owners of enormous condominium buildings can be phased in over three years.
However his plan is already dealing with warmth from the Small Property House owners Affiliation, which mentioned the proposal would “move the city in the wrong direction.”
“The idea of more than doubling the tax rate on large or ‘luxury’ apartment buildings from $11.58 to $23.60 per $1,000 of assessed value would have devastating consequences for both property owners and renters,” the group wrote in a letter to Worrell.
“Property taxes are already the single largest operating expense for many owners; increasing them by over 100% would push some properties into noncompliance with loan covenants, force others into foreclosure, and reduce funds available for maintenance and capital improvements,” the affiliation added. “Ultimately, these costs would be passed on to renters, producing rent increases of roughly 20% and worsening Boston’s housing affordability crisis.”
The group additionally famous that as a result of bigger residential properties are assessed based mostly on web revenue, greater taxes would “reduce their valuations and shrink the city’s overall tax base, ironically undermining revenue and forcing further rate hikes, possibly even on homeowners.”
Worrell’s plan would recategorize condominium buildings with 30 or extra models as industrial.
It could additionally create an inexpensive housing exemption for big condominium buildings that will permit for an extra 50% lower of their tax invoice with an inexpensive housing exemption.
The proposal would come with a home-rule petition to shorten the size of tax breaks from 15 years to seven, which Worrell mentioned would permit town the pliability to create short-term tax breaks on newly constructed condominium buildings.
“Today, corporate landlords can pay about half a month of rent in property taxes per high-rise unit, while small landlords can end up paying 3 months’ worth of rent,” Worrell mentioned. “This reform right-sizes contributions from commercial-style assets, gives deep discounts when owners keep most units affordable, and delivers real relief to homeowners and small landlords, all without increasing the City’s total tax levy.”
The proposal drew assist from advocacy teams, together with the Massachusetts Inexpensive Homeownership Affiliation and the Dudley Avenue Neighborhood Initiative.
“MAHA strongly supports this proposal that offers property tax relief to homeowners being squeezed by rising costs,” mentioned Symone Crawford, government director of the Massachusetts Inexpensive Homeownership Alliance. “When you own the home you live in, it’s your shelter, and eventually your nest egg. It should be taxed at the lower residential rate. When someone owns a large apartment building, it’s a commercial enterprise and should be taxed as such.”
“This housing tax plan is not just a policy, it’s an investment in stable communities and economic opportunity,” mentioned John Smith, government director of Dudley Avenue Neighborhood Initiative. “This tax plan is a smart, targeted investment that ensures working families, seniors, and others can live in their neighborhoods long term.”
The Metropolis Council is predicted to take up the proposal at its assembly on Wednesday.
