Commercial real estate tax rate hurting building owners

February 11, 2010
By

The Board of Alderman tackled the commercial tax rate Monday night at city hall, demanding that the city give relief to commercial property owners negatively affected by the state’s second highest commercial property tax.

At $37 per $1,000 of value, Everett’s commercial property tax has caused a spate of commercial buildings in the area of Everett Square to be put up for sale.

In addition, because of the higher taxes that must be paid on commercial properties, renters are being handed large increases making their viability a question mark in the year to come.

Monday night, Aldermen Joe McGonagle and Michael Marchese asked that the city consider a 10% exemption for commercial property owners for the year 2011.

“We’re hurting businesses in this city with the $37 tax rate. What we’re proposing effects only 449 properties that would be eligible – but it could save many businesses and commercial property owners in the city now having a hard time,” McGonagle said.

Alderman Sal Sachetta said he agreed. “I’m definitely in favor of this. Some form of relief is needed.”

Marchese said the whole tax situation is horrible.

“We need to help small business.”

The motion also required the mayor to appear at the next meeting of the Aldermen on February 22.

The motion passed by an unanimous vote.

“Unfortunately the tax increases came at just the worst time. Renters don’t want increases, they’re asking for decreases. Some of them are on the verge of going out of business.

What needs to be done?

According to Joseph Sachetta, who owns a major business and buildings in Everett Square, city government needs to find a way to reduce the cost of running the city because the revenues simply aren’t there. Or they need to find a better way to re-distribute the shortfall among all taxpayers.

“Everyone is struggling. Everyone has to get together to figure this out,” said Sachetta.

Sachetta said the higher commercial tax rate is an impediment for owners because so much has to be paid in taxes at a time when revenues are declining and values dropping.

“Then when you try to sell your property, no one wants to buy it because the taxes are so high.”

  • Geez, everytime I see blogs this good I just want mine to be there already! 🙂 Great work.

  • For those who own commercial property, a Cost Segregation Study should seriously be considered as well. It can significantly reduce tax liabilities and increase cash flow.