Reading Selectmen Retain Single Tax Rate for Residential and Commercial Property

Reading will maintain a single tax rate for its residential and commercial property for fiscal 2013. That rate is $14.39 for each $1,000 of a property’s valuation, up from $14.15 in fiscal 2012.

Yes, Reading’s tax rate will rise for fiscal 2013, but the average tax bill for a single-family house and a commercial property will dip, according to figures presented to the Board of Selectmen Tuesday by chief appraiser Vincent Santaniello.

The average tax bill for a single-family home will decrease, according to Santaniello, from $6,290 to $6,220.

The average commercial tax bill will drop from $22,121 to $21,698.

The value of an average single-family home here has dropped from $444,500 to $432,300, according to Santaniello’s charts.

That’s because Santaniello revalued the town’s single-family properties, he explained Wednesday to Patch, for what’s technically termed an interim year adjustment. On average, those properties lost about two percent of their value, he said. That’s in line, he said, with home sales figures from 2010 and 2011 from the Warren Group.

The average value of a piece of commercial property dipped from $1.56 million in fiscal 2012 to $1.5 million in fiscal 2013, according to Santaniello.

The main reason? Fewer commercial properties. Several commercial properties morphed to residential, such as 30 Haven Street and Reading Woods, Santaniello said. In addition, new growth in the “personal property” tax class, which includes business supplies and utilities, the chief assessor told Patch, went into the commercial class coffer.

Tax classification hearing

After little discussion, the Reading Board of Selectmen voted Tuesday to maintain a single tax rate for residential and commercial property.

William Crowley, a member of the Reading-North Reading Chamber of Commerce and Leslie McGonagle of Reading Gymnastics Academy urged the selectmen to maintain a single tax rate.

Shifting some of the tax burden from residents to commercial property owners would be unfair, they said, and discourage business from moving here.

Under the greatest shift, the residential tax rate could have dropped to $13.58 per $1,000 and the commercial, industrial and personal property rate risen to $21.59 per $1,000, according to figures presented by Santaniello.

Just under 90 percent of Reading’s property – 89.9 percent -- is residential, he said.

Of the commercial properties, 96 are valued at less than $500,000, according to the chief appraiser. Six are valued at between $10 million and $23.5 million.

In addition to Reading, three other communities in the Middlesex League have a single tax rate, according to Santaniello:  Winchester, Arlington and Belmont. Eight communities in that league have split tax rates:  Melrose, Stoneham,  Wakefield, Wilmington, Woburn, Burlington, Lexington and Watertown.

Like Reading, Melrose, Wakefield, Winchester, Arlington and Belmont are predominantly residential, he wrote.

Erin Calvo Bacci asked about the taxes on Sam’s Bistro since 2009, on behalf, she said, of the eatery’s owner.

Commercial and industrial properties are taxed based on their income and expenses, not their sales, Santaniello said. The chief appraiser asked that the property owner email him so he could explain how and why the property’s value had changed.

The property tax rate is calculated mathematically, Santaniello said, by dividing the tax levy – the revenue a community can raise through real and personal property taxes – by the total value of all taxable property and multiplying that result by 1,000.

For Reading, that’s $53 million (the levy) divided by just under $3.7 billion (total value), which equals .01439, times 1,000, for a tax rate of $14.39.

The maximum that a community can levy in a given year, according to Santaniello’s glossary of tax rate terms, is equal to last year’s levy plus 2.5 percent, plus new growth, plus any debt exclusions or overrides. The levy limit for fiscal 2012 was $51 million.

Tax bills will probably be mailed out in mid-December, according to Robert LeLacheur, assistant town manager and town finance director.