After about a year of visiting homes, commercial buildings and apartment buildings all over Chelsea, the City’s Assessing Department has finished it’s comprehensive property value assessment and it appears that values are way up and tax bills will be too.
City Manager Tom Ambrosino made an elaborate presentation to the City Council on Monday night prior to the regular meeting to explain the property tax system and the most recent numbers that are coming in for Chelsea this year.
The good news is that the values are set, the bad news is that it’s going to be costly for residential property owners.
“Residential values have increased much faster than commercial/industrial values and there’s going to be a large shift from commercial/industrial taxpayers to the residential taxpayers,” he said. “Residential taxpayers are going to pick up more of the burden than they did last year. That’s what’s happening out there. A similar scenario took place in the early 2000s. It was very painful for the residential taxpayers. I fear we’re in that same cycle. Anyone trying to sell a property in Chelsea will tell you it isn’t on the market long. That’s reflected here in these numbers…This is not good news for the residential property owner in Chelsea.”
Three-family homes are likely to be hit the hardest.
There are 951 three-family homes in Chelsea and their bills will increase by an average of $636 over last year – to about $4,289.
Single-families are next hardest hit, with 842 single-family homes with an average increase of $431 over last year – for a total of $2,918.
There are 1,201 two-family homes and they will see an average increase of $325 over last year, with a bill of $3,690. Condo owners will be hit the least hardest, with an average increase of $107 over last year and a bill of $1,715.
The residential tax rate, which won’t be set until November, is expected to be $14.25 per $1,000 of value, down from last year’s $14.40 rate. The commercial/industrial rate is expected to be $32.22 per $1,000 of value, down from last year’s $33.45 rate.
The new assessed value increases are as follows (averages):
- Single-Family, +16.8 percent
- Condo, +8.9 percent
- Two-Family, +10.9 percent
- Three-Family, +17.3 percent
- 4-8 Family, +5.8 percent
- 9-plus Family, +7.8 percent
- Commercial, +1.8 percent
- Industrial, +9.2 percent
Per state law, the Board of Assessors have to update property values every year based on similar sales from the previous year. Every three years, they have to certify their values with the state Department of Revenue. However, every nine years, they have to do a full revaluation that includes inspecting every property in the City to the extent possible.
For the past year, that’s what the Assessors have been working on, and they have inspected about 5,000 properties.
Residents who live in their properties will again qualify for the 20 percent residential owner-occupant exemption.
While most taxpayers will have to grin and bear the increases, Ambrosino is calling for several pieces of relief to be approved by the City Council for the elderly, widowed and disabled who qualify for state exemptions.
For example, he said one clause allows for a $175 exemption, but Chelsea has never adjusted that exemption for inflation – which state law allows.
“The rate of inflation was just never adopted in Chelsea and it has been at $175 forever,” he said. “Other municipalities that have adopted it and have adjusted it for inflation have an exemption that is well over $200.”
Other areas suggested include reducing the timeframe for ownership to five years, and changing the asset limit for mean’s testing.
For another piece of help to the same group of people, he suggested doubling a $500 circuit breaker exemption to $1,000 and reducing the qualifying age to 65 – as well as increasing the qualifying income and asset limits.
“The bottom line is more seniors will be able to qualify and get the most out of these exemptions,” he said. “I am going to propose you do these things.”
Councillor Matt Frank was concerned about the cost of implementing all of the savings, and asked if there was a dollar figure.
Ambrosino said he could not tell how much it would cost, but he is anticipating that the $48,000 in exemptions claimed last year would double.
“In total, there were $48,000 in exemptions for these folks granted last year,” he said. “I’m figuring that would double, but even if it triples that’s insignificant in a $168 million budget. If they quadrupled, it won’t be that much for us, but it will make a tremendous impact for these people.”
For next year, Ambrosino also proposed that the Council put into the State Legislature for a Home Rule Petition that would increase the residential owner-occupant exemption from 20 percent to 35 percent. He also has proposed to increase the senior citizen work-off program at City Hall from $500 to $1,000.
A hearing on the tax rate will take place on Nov. 9 before the City Council.