NORTH READING — In Fiscal Year 2022, the town’s new property tax rate has decreased slightly, to $15.00 per $1,000 of valuation. The Select Board voted unanimously to both establish this new tax rate and to keep the single tax rate in place for all classes of property – residential, commercial and industrial.

The new tax rate is considered an estimated tax rate until the state Department of Revenue certifies it.

The only two years during which the board set a split tax rate between property classes were 1985 and 1988. Splitting the tax rate does not generate new revenue, it only reallocates the levy burden, explained Debbie Carbone, the town’s chief assessor.

However, while the tax rate has decreased by 63 cents per $1,000 of valuation, the current hot real estate market means that the assessment of the “average” home in North Reading has increased significantly.

In FY2021, there were 4,288 single family homes in town with an average value of $615,632.

Brace yourself for the FY22 value of the average home in town — it has increased to $659,180. There are currently 10 more single family homes this year than last year.

As Carbone also pointed out, these assessments are based on a full year of data, therefore they are one year behind because the tax rate must be set annually in November. 

Just four years ago, in FY18, the average value of a single family house in town was $493,241.

State-mandated process

The process of establishing a new tax rate each year is mandated by the state, as is the required property tax classification public hearing which was held by the board Nov. 22. During this process, in addition to maintaining the long-standing tradition of a single tax rate for all classes of property, the board members voted against establishing a residential tax exemption of up to a maximum of 20 percent that would shift the tax burden within this classification from those with the lowest assessed values for their principal residence to the highest assessed properties that do not serve as the principal residence of those taxpayers. This is much more commonly done in communities where there are many vacation homes or rental properties, for example.

Similarly, the Select Board chose not to adopt the small commercial exemption of up to 10 percent to shift the commercial class tax burden from “eligible parcels” to “ineligible parcels” as the town does not really have the eligible parcels required under the statute.

Per information compiled for the public hearing by Carbone, “eligible parcels” must have a valuation of less than $1M and must be owned by a business that employs fewer than 10 employees as certified by the state Dept. of Workforce Development–Division of Unemployment Assistance to the town’s Board of Assessors.

• The board did not vote to allow a discount of up to 25 percent of the open space share of taxes because Carbone the town does not have any classified open space land. Under this provision open space is very narrowly defined as “land that is maintained in an open or natural condition which contributes significantly to the benefit and enjoyment of the public and which is not: subject to a permanent conservation restriction; held for production of income; or taxable under the provisions of Chap. 61 (forest land), Chap. 61A (farm land) or Chap. 61B (recreation land).”