Already a subscriber?Boston Mayor Michelle Wu is seeking to raise commercial property tax rates to help protect home owners from the brunt of the historic slump in office property values.
The move would favour home owners while potentially deepening the pain for commercial real estate during a nationwide slump in office demand spurred by the rise of remote work. It’s against this backdrop that a plunge in the assessed value of Boston’s office buildings could necessitate a rebalancing of commercial and residential property taxes, said Ms Groffenberger.She likened Massachusetts’ property taxation to a pie that remains constant, regardless of real estate value fluctuations. If commercial property values plummet without a corresponding tax adjustment, residential rates would have to rise.
Ms Wu’s plan is modelled on a similar reclassification of property tax rates that occurred two decades ago to save home owners from a massive tax increase after the burst of the dotcom bubble dragged down the commercial property market. “This is really the most challenged office market on record for the city of Boston,” Mr Myers said. “The pain is here, it’s going to get worse in the near term, and it’s going to put more pressure on those owners to find ways to save costs.