Chelsea has established its tax rate for both commercial and residential properties. Residential properties will be taxed at $12.92 per thousand of assessed value, while commercial and industrial properties face a rate of $30.60 per thousand. This marks an $0.83 increase, representing a 4.1% rise in the typical single-family tax bill. For Fiscal Year 2011, the average single-family home assessment rose by $600, reflecting property values from 2009. This represents less than one percent growth and marks the first tax increase in four years, following an average decline of 7.4% in prior years according to city records. Beyond setting the rate, the Chelsea City Council passed two measures designed to reduce the average single-family tax bill by $1,629. “I’m thrilled that we have once again taken action to keep residential taxes as low as we possibly can,” said City Council President Leo Robinson. “Our efforts are consistent with our approach to restrict the cost of government here, while continuing to offer great services for the tax dollars we do collect.” The Council moved to maximize the shift of residential tax burden toward commercial and industrial taxpayers while implementing an additional benefit for owner-occupied homes through a residential exemption. “We value homeowners here and want to encourage them to continue to make an investment in their properties and neighborhoods,” said Councillor Mike MeKonnen. “They are the backbone of our community.” According to Ash, the tax-rate-setting process is inherently complex, and the Council’s decisions regarding the commercial shift and residential exemption added further complications. “I am in total agreement with the Council. I support wholeheartedly what they did,” Ash noted that Chelsea collects 2.5% more annually in property taxes. The actual tax bill increase depends partly on how individual property classes fared in valuation changes. In recent years, residential values have declined far more sharply than commercial values, shifting the tax burden from residential to commercial properties. However, in the most recent measurement period, commercial properties experienced lower valuations while residential declines appear to have stabilized. Consequently, residential taxes increased 4.1%, compared to 1.4% for commercial and 1.9% for industrial properties.
Real estate statistics show that from 2006-08, single-family properties lost 36% of their assessed value. Condos and two-family homes declined 2% in 2009, compounding losses of 31% and 47% respectively since 2006. Three-family homes held steady in 2009 after suffering a 52% decline since 2006, the steepest drop among residential categories. Commercial properties have declined 9% in value since 2006, while industrial properties are down 8%. Assessed values represent estimates across a range of properties and may not reflect the actual market value of any individual property. “Your head can really spin after studying the figures we need to review when setting rates,” suggested Councillor Robinson. “What’s the most important one for me is where do our residential tax rates stand versus others in the region. Once again, after looking at all the available data, Chelsea has the lowest burden on single-family owner-occupants. We’re all very proud of that.” Third quarter tax bills will arrive around January 1. Since first and second quarter bills already sent contain no tax changes, the upcoming bill will show the new assessment and 50% of the total dollar change in individual property taxes. The fourth and final bill, due around March 1, will account for the remaining 50% of the difference. Abatement applications will be available at the Assessors Office during the first week of January and must generally be filed by February 1.