WOBURN - With the scorching hot real-estate market fueling another staggering year-over-year increase in property values, the typical city homeowner can expect to see their tax bills climb by $288 this fiscal year.
During a special tax classification hearing in City Hall last week, the City Council voted unanimously to freeze the current commercial-industrial property (CIP)” shift at its maximum allowable rate in FY’22. The decision, which places a considerable higher tax burden upon the community’s commercial and industrial landowners, will actually result in the residential tax rate increasing for the second consecutive year by a penny from $9.33 to $9.34.
However, with the average single-family home in Woburn now appraised by the assessor’s office at an estimated $552,462, residential taxpayers will nonetheless have to shell out more money to cover their share of the city’s $148.4 million tax levy.
Had the council opted to abandon Woburn’s dual tax-rate or reduce the burden being borne by commercial landowners, that average $288 tax increase for the typical single-family home would have certainly been substantially higher.
“”It means the residential class of property would pay 71 percent of the levy [they would otherwise pay under a single tax rate],” explained Chief Appraiser John Connolly of the adopted .71 residential factor. “Under this scenario, the tax shifts to the other classes of property by a factor of 175 percent.”
According to assessor’s department records, over the past year, the average single-family home value in Woburn has rocketed up by around $30,275. As a result, the typical homeowner - who paid a $4,872 tax bill last year - can expect to be billed $5,160 for real-estate taxes in the fiscal year that began in July.
During the recent public hearing, various members of the City Council argued that under an understood bargain between local residents and the business community, commercial and industrial landowners pay a higher tax bill in exchange for the traffic and other neighborhood nuisances that arise from living in a city with a thriving merchant class.
For that reason, none of the councilors objected to the proposal to keep the maximum 175 percent CIP shift in place.
“I have no problem with this. A lot of it is expected,” said Ward 2 Councilor Richard Gately. “When you look at it, it’s like a penny difference [year-over-year] for residential.”
“I think it’s very important to explain the shift and why residential property owners get a break,” Councilor at-large Michael Concannon later remarked. “The shift is fair and reasonable and gives a break to the residents who have to put up with all this business activity.”
Per the council's approval, the FY'22 commercial/industrial tax rate will be set at $22.77. Current FY'21 commercial rates are $22.86 per $1,000 of a property's total valuation.
Tax bills are calculated by taking every $1,000 of a property's assessed value and multiplying that figure by the residential rate. As an example, a resident whose home is worth $100,000 would multiply 100 times $9.34 to determine his or her annual costs.
Generally, the assessed value of Woburn's homes and businesses lags behind the actual market worth of those properties, as the assessor's office largely bases its calculations off of prior year real-estate sales.
In practice, the city sends out tax bills on a quarterly basis. Because the first two bills are mailed before the City Council sets its rate each year, those statements are estimates.
Any discrepancy between that estimate and the actual rate set by the city is then made up in the last two billing cycles.