Framingham Tax Increase has Residents Concerned, Filing Abatements

In the course of doing my Real Estate Activities, I spend a lot of time at town halls all across Metrowest. Today I was in Framingham doing research, and I was surprised to see that the Assessors office was so full of people that there was a line out the door. (It's not a big office, but still, this was a surprise.) Even more shocking, everyone (except me, of course) was there for the same reason. Their tax bill. Taxes AND assessments went up in Framingham, resulting in much higher tax bills for many residents. The mood in the office was pretty tense, people were pretty upset.

 

What happened to the Tax Rate in Framingham?

Well, there's an overview of what happened at the selectman meeting, but it's not very clear, so I'll try to make it a little simpler.

 

The difference in Residential and Commercial real estate markets Can have powerful effects on taxes

Towns have a budget that they have to pay for. For most towns and cities in MA, the taxes on property are essentially the only way that towns raise the money for their budgets. What people forget, of course, is that there are TWO classes (and sometimes more) of real estate that get taxed. Residential and Commercial. Residential is the easiest to understand, and generally the largest - it's the houses that we all live in. Commercial, of course, includes office buildings, restaurants, factories, apartment buildings and the like. Many times, the two markets move in tandem, but sometimes they do not.

 

They did not in Framingham, with serious consequences for residents.

 

The town assessor reported that in 2010, home values on average were up 4.75% in Framingham. That's not a misprint people, and if you were reading this blog in 2011, you would see the market was EVEN more tight in Framingham than last year, and I'll bet prices were up again (probably not as much, but up). The problem is that in 2010, commercial values were still falling. That means the taxes that Framingham can collect on those buildings went down, and as such they need to get more money from - you guessed it - the residential folks. It's double painful in Framingham because they have a "dual-tax" rate, where commercial buildings are taxed at roughly twice the same rate as residences, but that makes it twice as painful when those values are falling. So the tax rate on Residents when up 1.75%, but assessments went up too, so those factors are multiplied together and that means tax bills are up 3-11% or more for most residents.

 

Still confused? Here's how the math works. The town of Framingham needs to collect $100 in 2011. The collect $50 from Residents and $50 from Commercial Property owners. What happened this year, is residence values went up, and commercial values went down. That shifts the tax burden to residences, unavoidably, so in this example residences now need to come up $52 for 2012 and Commercial Property will only be responsible for $48. Total bummer, I know, but Framingham is certainly not alone. Any town with significant commercial property is likely facing a similar problem.

 

Taxes Too High? File an Abatement

Many residents have already, but if you believe your property is not being valued correctly, you can file for an abatement. The forms you need are here:, but be warned, you MUST file your abatement by February 1st, or the town can dismiss it. (An abatement is a legal process, if you have questions, you should ask an attorney, and not rely on this posting). Filing an abatement does not guarantee your taxes will be lowered, so you should do research first to find out if you are a good candidate for an assessment adjustment. Good Luck-

 

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Matt Heisler