The City Council will meet in a special session with Mayor Ted Bettencourt and city finance officials next Tuesday to set the new property tax rates for homeowners and businesses in Peabody.
City assessors said this past summer during budget talks that property values had remained relatively stable from the year before and projected an $88 average tax increase for single-family homes to cover part of the budget increase.
Without any major changes to that financial plan, it would ensure residential taxes in Peabody remain among the lowest in the region with most homeowners paying less than $3,500 a year in property taxes.
The increase last year was $70 on average. The value of an average single-family home in Peabody for 2012 was $285,800.
The tax classification hearing will be held at 6 p.m. on Dec. 11 in Wiggin Auditorium at City Hall. Bettencourt, Finance Director Patricia Schaffer and Chief Assessor Fred Martini will make a presentation, followed by a vote from the council.
The current rates, which are for calendar year 2012, are $11.82 for residential and $23.43 for CIP (commercial, industrial and personal property). The rates are per $1,000 of valuation.
Based on the average home value, that results in an average tax bill of $3,378.16 for 2012. Those property values are based on sales activity as of Jan. 1, 2011, and the new values used to fix the rates will be based on activity as of Jan. 1, 2012.
The split rate between residential and CIP is due to tax classification, which the city uses to offset the burden on homeowners but also to achieve equity so that both residential and CIP properties see about the same percentage tax increase from year to year.
For 2012, the classification factor is at 160 percent, meaning 62 percent of the burden is on homeowners while 38 percent is on CIP. Otherwise, under an equalized tax rate, average homeowners would have payed $783 more while business owners would have payed a whole lot less.
For the past few years, the city has published a brochure for residents to explain how taxes are calculated, answer the age-old question of why taxes go up when property values go down and other aspects to the tax classification process.
The brochure is available on the city’s website (the 2013 brochure will be posted sometime after Dec. 11), in paper form at City Hall or at the Torigian Center and public libraries.