Do Property Tax Rates matter to Buyers?
After posting my article Marblehead leads the way in Million Dollar sales in Essex County in which I speculated that different property tax rates may be one reason for the changes in sales in different towns, I checked my blog records and discovered that my posts on tax rates are among the most widely viewed.
The interest in tax rates is demonstrated at all price levels. It is easy to understand that a buyer of a $5 million home would save $50,000 a year in taxes choosing the town with a low tax rate rather than one with a high rate. $50,000 a year matters regardless of income level!
In recent weeks, however, I have worked with two buyers in the +/- $500,000 bracket, both of whom chose Marblehead in part because of the tax rate. And both independently said that they would rather put their money into building equity than paying high tax rates.
Here is the table of tax rates for the North Shore for the last three years. I have 13 years of tax data for every town in Essex County. If you are interested just ask me.
Source: Department of Revenue, Assessors’ Offices
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If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Andrew:
Need a bit of help. Which #(s) in “Twenty Questions with Marblehead’s Assessor” are the key(s) to knowing/understanding that the state has complete control over how aggressively a town/city can, or can not assess property?
I did see that there is a Mass statute regulating how a town/city can assess properties, but also thought there is a mention of a 10% leeway in their calculations.
Thank you,
Jody
Thank you for the heads up, Andrew.
Andrew:
Tax rates are only one half of the equation. How aggressively a town/city assesses property is the other.
Tax rates, by themselves, should mean little in terms of where one may choose to live; if limiting tax payments is the criterion. What buyers need to also know is how accurately are the properties assessed. Then they can make better decisions for themselves.
Regardless, towns and cities are going to exact their pounds of flesh for budget purposes with whatever combination of tax rates and assessments are required.
Thank you for your good work.
Jody
Jody: towns do not have discretion in how they assess property, so tax rates are an accurate reflection of the dollar amount of taxes that will be paid.
Please see my article “Twenty Questions with Marblehead’s Aseessor” for an explanation of the process.