BRAINTREE − The hot real estate market is pushing up the values of residential properties, but commercial property values in Braintree haven’t kept pace.
That’s bad news for homeowners, whose property tax bills will rise 6.3%, which represents a $364 increase for an average home.
The town council approved a property tax classification plan Tuesday night that maintains the maximum shift in the property tax burden between residential and commercial property owners allowed under state law.
The estimated residential tax rate will fall from $9.76 per $1,000 in assessed value to $9.50, Mayor Charles Kokoros wrote in a memo to the town council.
Average home values rose from $593,028 for the town’s last budget year to $647,573, or 9.2%.
Multiply the new home values by the new tax rate and you get an average annual tax bill of $6,152, up from $5,788 last year.
A chart prepared by Municipal Finance Director Ed Spellman showed the town’s average residential property values have nearly doubled in the past decade, up 92% from $335,915 in the 2013-14 budget year to $647,573 in the current year.
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Commercial property owners will also see a drop in their tax rate, from $21.18 per $1,000 in assessed value to $20.27. Commercial and industrial values grew 1.5%, lagging the residential properties’ increase.
“We haven’t seen the increases on the commercial side, which puts a strain on our homeowners,” Kokoros told the council.
For the average commercial property, valued at $3.02 million, the annual tax bill will decrease by $2,300 to $61,288, Spellman said.
The mayor said that when compared to other area communities, Braintree’s tax bills are among the lowest.
District 2 Town Councilor Joseph Reynolds, who chairs the ways and means committee, said the commercial values reflect national trends, with the decline in brick-and-mortar retail stores due to online sales and increased vacancies in office space due to the shift to work-at-home.
“As we look over the horizon, we have to find other solutions” to the rapid growth in residential property taxes, Reynolds said.
Town Council President Meredith Boericke noted that for the second year in a row, the town fell short of its projected new growth revenue, property taxes on new and improved buildings. The shortfall was $255,000.
Boericke said the money must be taken from somewhere else.
The deficit will most likely be taken out of the town’s free cash reserve, which is made up of money not spent in previous budget years and revenues that exceeded estimates.
No one spoke in opposition to the classification plan at Tuesday’s meeting.
The tax rates are subject to review and final approval by the state Department of Revenue.
Reach Fred Hanson at firstname.lastname@example.org.
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