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January 24, 2020

Worcester property tax valuation appeals decreased 36% since 2017

Photo | TMS Arial Solutions Downtown Worcester

For the third consecutive year, the number of commercial and industrial tax abatement applications and refunds continued to trend downwards in Worcester, according to data from the city’s Assessors’ Department.

In 2019, applications for those properties fell to 134 in 2019, down from 208 three years ago, a nearly 36% decrease. During the same period, the number of abatements issued was 16, down from 69 in 2017, a 77% dip.

Assessed values are a yardstick for a municipality to collect property taxes. The role of the assessor is to put a fair market value on a property. Landlords have a right to seek an abatement or rebate on the taxes they’ve paid if they disagree on how their property is valued.

“It looks like we are getting it right,” said John Valade, acting city assessor. “We set the property values, and our expertise is doubled checked by the Massachusetts Department of Revenue.”

The combined valuations of commercial and industrial properties in Worcester rose to $2.7 billion last year, up from $2.6 million in 2017.

Thomas Zidelis, the city’s CFO, said assessed values of a home or commercial property typically lags the market. Valuations are calculated at the beginning of the year, 12 months prior to when the tax bills are sent in December.

For example, he said, on Jan. 1, a 100,000-square-foot office building was fully occupied. But by year’s end, a major tenant moved out leaving much of the space vacant. In that case, he said, the landlord may seek an abatement.

The downward trend from the last two years comes as the number of commercial/industrial abatement applications grew to 208 in 2017, up while the number of abatements increased by three.

Valade said that was a time period when rents in large apartment buildings were rising, pushing valuations up.

“We try to make sure we are accurate at the same time the market may be fluctuating up and down," he said.

Starting on Jan. 1, the business tax rate rose to $35.16 per $1,000 in assessed value, up from $34.90. The residential rate will lowered from $18.00 to $17.00.

The split tax rate has been a contentious issue as the Worcester Regional Chamber of Commerce has advocated for the city to move to a single-tax rate.

The chamber argues a single-tax rate will make the city more attractive to business, which will raise the overall property valuation in the city and generate more tax revenue without the need to raise business or residential tax rates.

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