IPSWICH — The town’s new property tax rate looks set to increase the average tax bill by $267 a year.
The estimate — still to be confirmed by the Massachusetts Department of Revenue — was presented to selectmen at a tax classification hearing last week.
The tax rate in fiscal year 2017 (FY17) was $14.19 per $1,000 of valuation. FY 2018’s rate will be $14.24.
Meeting with selectmen, the town’s board of assessors said that would bring the town’s average tax bill to $7332.33.
Last year’s bill average bill was $7,065.41. The assessors’ memo is embedded below.
Although the tax rate is going up by just 0.4 percent, the bill being paid by taxpayers is actually rising by 3.8 percent.
The assessors, Karen Rassias, John Moberger and Robin Nolan, explained the differences were due to an increase in valuations.
However, they predicted slower growth years ahead. “Last year we still had growth from Turner Hill, this year they’re done,” Knowles said.
“We see it slowing down for fiscal ’19 also,” she added and predicted no big growth until 2020.
Ipswich’s tax base is skewed overwhelmingly toward residential property, the assessors noted.
The town has a total tax valuation of $2.81 billion. Residential property accounts for around $2.51 billion of that.
That means of the taxes raised by the town, a little over 89.4 percent comes from homeowners.
The other 10.6 percent paid comes from business and industrial taxes.
The average single family home was valued at $514,911 in FY 2018. That is up by 3.4 percent, or almost $17,000.
“The valuations are rising as well as the tax rate,” noted Selecman Linda Alexson.
“Every three years we do a major revaluation,” town manager Robin Crosbie said. There are smaller interim adjustments, she added.
“Some properties will go up, and some will go down, relative to each other in the markets,” Crosbie said.
However, assessors are moving toward a five-year revaluation cycle, she noted.
At the hearing, selectmen also voted to keep the same tax rate for residential and commercial properties.
Under state law, they have the option of shifting a portion of the residential rate onto the business sector.
A spreadsheet presented by assessors showed the residential rate could drop to $13.40.
However, the proportional impact on businesses would be higher, Knowles said.
For the maximum five-percent shift allowed, the average house would save $46 a year. But the average business would pay $419 now, she added.
“We don’t have enough commercial and industrial to split the rate,” Knowles said.
Bill Craft, chairman of the selectmen, said the single rate would help to keep business in town.
He noted they also pay personal property tax on equipment and fixtures. Horses are also subject to the tax, the board was told.
“It [the same rate] keeps us more attractive to investment on commercial and manufacturing,” Craft said.