Boston’s Abatement Applications at 28-Year Low

Abatement decline has added $8M to the tax levy since 2012

Over the past five years, the number of abatement applications filed in Boston to reduce property tax payments decreased from 2,086 in FY12 to 1,586 in FY17, a reduction of 500 or 24%. Applications in FY16, the latest full revaluation year, was 2,166 or a decrease of 8.3% since the previous revaluation year in FY13.    The recent abatement application counts follow a declining trend since 1992 when 9,334 applications were filed. From FY92 to FY17 the number of applications has dropped by 85.4%.

The reduction of applications is due to improved assessing practices to ensure assessments reflect market effects, application of advanced modeling techniques and the City’s success in defending its values before the Appellate Tax Board (ATB) and court challenges.

The escalation of commercial values, reflecting the market, accounts for the increase in commercial abatement applications by 56 or 5.7% since FY12. Residential applications totaled 549, a drop of 556 or 50.3% during the same time. Of the residential filings in FY17, condominium owners represented the largest share at 48.5%, followed by single-family owners at 14.7% and three-family owners at 14%. These shares roughly correspond with the share of overall residential properties in Boston.

More $ For Operations
The reduction of abatements during this time has enabled the City to reduce its overlay reserve for abatements and add $8.1M to the property tax levy since FY12.   The percent of the overlay reserve of the gross tax levy has declined from 2.4% in FY12 to 1.4% in FY18. The FY19 recommended budget further reduces the overlay by $7.6M to just 1.0% of gross property tax.

Open ATB Appeals
The caseload of open property value appeals before the state Appellate Tax Board also has decreased significantly since 2012. Open cases have declined from 491 in 2012 to 284 in 2017, a cut of 42.2%. The City’s success in defending its values and efforts by the ATB and City to resolve cases have led to this decline.

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