Property owners feel pinch: Home values send tax bills through roof
by Kay Lazar
Sunday, January 5, 2003
www2.bostonherald.com
A collective shriek is echoing across Massachusetts as homeowners in many communities open their latest property tax bills and see their assessed home values soaring 30, 40 and in some cases more than 100 percent, sending their tax bills skyrocketing by hundreds of dollars.
Recession-weary residents are startled by the monster bills that seem out of whack with the tightest fiscal times in more than a decade.
But the 2003 fiscal year tax bills that hit mailboxes in late December reflect the sizzling housing market of 2001 because tax assessors traditionally use housing-market prices from the previous year to measure home values.
Now, lagging tax assessments are finally catching up to the housing boom of the late 1990s, but they are slamming many who are already going bust.
``Many (seniors) are saying they are going to have to sell their homes and move,'' said Pat Carty Larkin, executive director of the Council on Aging in Westwood, where anxious seniors on fixed incomes have been calling about their new sky-high tax bills.
``Others are deciding whether to buy their medicines or pay their taxes. They can't afford both,'' Larkin said.
The upper-middle-income community in Boston's southwest suburbs just completed its triennial property revaluation - the state requires each community to update property values every three years - and Westwood found the average home increased by 40 percent in value during that stretch. Average tax bills shot up by 15 percent.
For Larkin, 58, the latest tax bills hit hard on several fronts.
As a homeowner in the blue-collar MetroWest town of Milford, Larkin just opened a property tax bill that jumped 8 percent.
But it was the tax bill for the summer cottage she and her husband own near Buzzards Bay in Mattapoisett that knocked her off her chair.
``It's a shack, a four-room little house that's not even winterized,'' Larkin said. ``When we purchased it 18 months ago it was assessed at $68,000. Now, it's gone up to $177,000.''
The Larkins' annual tax bill in Mattapoisett nearly doubled, from $1,400 to $2,600.
For the past several years, the state's Department of Revenue has been encouraging local tax assessors to update their property values annually so that a community's residents don't suffer sticker shock from tax bills that haven't been regularly adjusted to reflect real market prices. State figures show an increasing number of local assessors followed that advice as house values and tax bills climbed steadily during the 1990s.
The state's numbers show that the average single-family home jumped 14 percent in value, with a tax bill that increased nearly 7 percent in the last fiscal year. While the state hasn't calculated the average increases for this year, reports coming in from across the commonwealth suggest that the new property values and taxes will leave last year's in the dust.
Consider Somerville. Residents are opening bills that show a nearly 30 percent increase in the value of the average single-family home, and a whopping 25 percent hike in the tax bill. That translates to about $476 more a year.
``I expect a lot of calls because of sticker shock,'' said Richard Brescia, Somerville's chief assessor. ``We have an overlay account of $1.2 million, enough to fund some exemptions for seniors, so they won't have to eat cat food.''
Somerville's property taxes, at $2,335 on the average single-family home, are well below the state's $3,000-plus average. That's because Somerville is one of just 11 communities that offers a sizable ``residential exemption'' discount, knocking $1,339 off the bill for each taxpayer who owns and occupies a house.
Somerville's hefty increases in home values pale in comparison to those in the Cape Cod community of Bourne, which hadn't updated its values in three years.
``Waterfront property, or those with water influences, such as those across the street from the water or a quick walk to the beach, went up over 80 to 110 percent, on average,'' said Donna Barakauskas, the town's new assessor who inherited the unpopular updating task.
``Water properties have been so underassessed for so long, it was catch-up for them,'' Barakauskas said.
Catch-up for those properties, she said, averaged about $1,000 more a year in taxes. Some shot up $2,500.
The latest property tax misery in Massachusetts is similar to woes ricocheting across the country as assessments catch up in all corners.
``There was some shrieking a year ago, but it's a lot louder now,'' said David Brunori, editor of State Tax Notes, a Virginia-based weekly that tracks tax trends.
``Now, with the economy down, the increased property tax burden hurts much more,'' Brunori said. ``People weren't complaining so much in 1999 and 2000 when the economy was roaring, incomes were up and consumer confidence was high.''
Added to the misery in Massachusetts is a lot of confusion, because many homeowners mistakenly believe the state law, known as Proposition 2 1/2 , is supposed to limit a community's total tax increase each year to 2 1/2 percent - unless voters agree to override that.
But the state law also says so-called ``new growth'' - new home construction, additions and renovations - can be exempt from that Proposition 2 1/2 cap.
An explosion of new growth and pricey homes in Needham through 2001 sent tax bills soaring.
``We have two-bedroom, one-bathroom Capes selling for $385,000 to $400,000, and many are being torn down and four- and five-bedroom colonials are built on them,'' said Jim Weidenfeller, Needham's chief assessor. ``It was nothing to see $60,000 to $100,000 kitchen upgrades.''
While Needham's superhot housing market has slowed down a bit, it wasn't in time to save many residents from superinflated tax bills.
``I have a tiny four-room house, one bath, no garage and they raised my quarterly bill from $580 to $1,028. I just can't do it. I have been retired for 20 years and a widow for 30,'' said one Needham senior who asked that her name not be used.
The Needham native said her house value jumped in the latest assessment from $217,000 to $350,000. ``How can a four-room house be worth that much?'' she said. ``Everything has gone through the roof.'' |
