HADLEY — The owners of an average single-family home in Hadley will see property taxes go up by less than $200 next year, the result of a rebound in the town’s commercial tax base and being a year removed from a return to having a single tax rate for all properties.
Acting on recommendations from the Board of Assessors at a tax classification hearing Wednesday, the Select Board approved having a single tax rate for all property classes. That rate will likely be set at $11.39 per $1,000 valuation, based on preliminary calculations.
The property tax bill for an average single-family home, now assessed at $439,600, will be $5,007, a $178 increase in the bill from this year’s $4,833 bill. About 1,600 houses in Hadley are considered owner occupied. The average property tax bill for a commercial property will be $9,651, up from $9,379, or a $272 increase.
The increase in property taxes for single-family homes is significantly less than last year, when the average single-family home, then valued at $418,800, saw a $364 increase in property taxes. That came on the heels of eliminating the shift in the property tax burden to commercial properties as. Coming out of the pandemic, the Select Board sought to give some relief to taxpayers. While some Hampden County communities use a split tax rate approach, including Holyoke, Hadley was the only Hampshire County to do so.
A maximum shift in the tax rate this year could have cut residential taxes by 22.5%, but would have raised the commercial taxes by 50%.
Assessor Dan Zdonek said almost 69% of Hadley’s $1.27 billion in total taxable property is in the residential class, with just over 31% designated as commercial or industrial. The portion of residential has become higher in recent years, after an extended period in which commercial properties accounted for about one-third of the total value.
“It’s a little higher than it has been normally, but it’s starting to trend downward,” Zdonek said. “I expect next year that commercial and industrial to take a big tick up, because you have some big commercial projects coming in.”
In addition, Zdonek said the assessors appear to have been undervaluing some commercial properties. Despite the rise of online purchases that has affected brick-and-mortar retail, a Hadley shopping center the town valued at just $16 million sold for $27 million last year.
“The values are still going up,” Zdonek said.
While he understands people will be concerned about their property taxes, Zdonek presented a chart showing that the average current bill of $4,833 is on par with the $4,883 paid by a typical Sunderland resident, the $4,994 tax bill in Hatfield and the $5,015 in Easthampton, and much less than the $8,984 tax bill in Amherst and the $6,725 in Northampton.
“Our taxes are relatively lower than everybody else,” Zdonek said.
The Select Board also agreed with assessor recommendations to not offer an open space discount or grant residential and small commercial exemptions.
Hadley has no parcels classified as open space, Zdonek said.
Granting a residential exemption, in which a 35% discount could be offered on the average residential value to owner-occupied residential properties, would mean any home valued at $543,400 or more would pay higher taxes. Zdonek said this exemption is mostly used in resort communities on Cape Cod.
Only about 55 businesses would qualify for the small commercial exemption, with most small businesses in town housed in shopping centers and malls owned by other entities.
Scott Merzbach can be reached at firstname.lastname@example.org.