Bostonians Furious Over Alleged Tax Assessment Penalties

Many commercial real estate owners in Boston can be described in one word: gobsmacked. Although they have appealed their property tax assessments, their assessments have soared sky high. This has caught the attention of a highly regarded non-profit which recently uncovered a potential conspiracy, causing many to question whether Bostonians are being secretly penalized for filing appeals. Let’s see what’s going on in the world of commercial real estate in Beantown!

Un-Fair Market Value

Commercial property owners are still feeling the effects from the COVID pandemic. In 2019, only about 6.5% of private sector workers worked from home. That number has risen to about 21.6% based on a recent Current Population Survey. Who’s Still Working from Home in 2025? A Look at America’s Telework Trends. Given these numbers, it’s clear that COVID has had a lasting impact on work behavior.

Despite the recent push for employees to return to the office, vacancies rates are up and fair market value continues to fall. On the bright side, the market couldn’t be riper for tax appeals. Many commercial property owners have tried to capitalize on lower market values by appealing their assessments. Yet they must feel like they’re living in the Twighlight Zone, because their assessments have increased. Even more strange is that this has seemingly only affected tax appealers rather than commercial property owners in general.

Commercial property owners have sought answers from the city. Unfortunately, an adequate explanation has yet to be publicly released, meaning property owners have been out of luck.

PNELF Decides to Investigate

The recent tax assessment phenomenon has captured the interest of a non-profit public interest law firm, the Pioneer New England Legal Foundation (PNELF). The organization reviewed the property record cards of commercial property owners. Some cards stated “ATB dispute” or “override. open appeal.” Along with these notations came something no property owner ever wants to see: additions on assessments. Some record cards allegedly had these notations removed before they were sent out, meaning some property owners never received notice of assessment increases. PNELF concluded that Boston has been penalizing tax appealers.

Boston’s Property Tax Dilemma

Decreasing commercial real estate values along with an increasing number of tax appeals has been a problem for Boston which relies on property tax revenue. PNELF alleges that to overcome this dilemma, the city has imposed hidden assessment penalties. This has resulted in significant assessment increases reaching upwards of seven figures for certain properties. To make matters worse, the city is carrying the increased assessments into the following tax year, compounding the burden on property owners.

PNELF’s Allegations

PNELF argues that Boston is violating due process and the First Amendment right to petition the courts to redress grievances against the government. In addition, it asserts that the city’s actions violate “fair cash valuation” (fair market value) and proportionality under G.L.C. 59 and the Declaration of Rights.

PNELF sent a letter to Geoffrey E. Snyder of the Department of Revenue, asking for an explanation of how the city will provide a remedy for property owners affected by the city’s practices. The city says that it is reviewing the letter but has yet to admit to such practices.

Boston Considers Shifting Tax Burden

As if commercial real estate owners weren’t hit hard enough, the city is considering shifting the property tax burden from residential properties, which currently occupy 67% of the city’s total assessed valuation, to commercial properties, which occupy 33%. Boston Property Tax Reform: Mayor Wu’s Proposal Explained. Ideally, shifting the burden would avoid increasing assessments on residential properties. Yet the proposal is not without opposition. Experts suggest that increasing the tax burden on commercial properties will exacerbate the commercial real estate problem by decreasing values even further. Boston has the third lowest residential property taxes out of all the major US cities, so this proposal may further benefit residential property owners at the expense of commercial ones.

How New Jersey Protects Tax Appealers

Even though Massachusetts and New Jersey allow taxpayers to appeal their assessments, New Jersey offers a unique advantage. Under the state’s Freeze Act, property tax assessments are “frozen” for two years following the year of a successful appeal. This shields taxpayers from increases by locking in their reduced assessments. The Freeze Act also safeguards taxpayers from municipal retaliation. You can read more about the Freeze Act in our post: Taxpayer Obtains Freeze Act Relief Amid City’s Outcry | MROD.

Unfortunately, Massachusetts does not provide property owners with this type of protection. This means successful tax appealers may face increased assessments the year following an appeal.

Conclusion

Boston commercial property owners have every right to be frustrated. They used legal means of challenging their assessments and have been stuck with increases. We will keep an eye out for any future developments.