I have a loft at the South End of Boston. It is a great loft building with almost 100 units. Some of the units are designed artist lofts, with a below market rate price and can only be bought and sold to certified artists.
My property tax problem started a few years ago (or more), but I only realized it this year, 2011. My tax bill is almost 3000 dollars more than what it should be. That means I have probably over paid tens of thousands of dollars over the years. And the city said they will not pay me back.
The problem is not due to a wrong valuation of the loft. I understand that valuation is tricky. The problem is that, someone at the tax department has wrongly classified my loft as a part commercial unit. Every year I was taxed, 25% of my property value, at the 31.04% commercial rate instead of the 12.79% residential rate.
For example: The loft currently is valued at about 600,000. The property tax should be roughly 600K x 13% = 7800 dollars. Instead it is: 600K x 75% x 13% + 600K x 25% x 31% = 5850 + 4650 = 10500, 2700 dollars more. That's right. And they city said they will not refund me the difference.
How did the error occur? The tax department mis-interpreted the master deed of the building. The master deed explicitly stated that certain units in the building are artist lofts, and they allow artists to work in them. There are two relevant exhibits to the master deed. Exhibit C is a simply listing of ALL the units in the building, noting the percentage ownership and size. All the units are listed as "studios", as this is a loft building. Lofts have no bedrooms. They are by definition "studios".
A different exhibit, exhibit D lists specific lofts units within the buildings as artist studios. These are the ones that are bought and sold as artists lofts, and allow live work. This is defined by paragraph 6 of the master deed.
See the problem? The tax department read the wrong list of units, mis-interpreted the word "studio" and decided to classify my non artist but a studio (no bedroom) loft as part commercial.
I spoke with the tax department and they have come out on a "site visit" to verify the unit is not an artist loft. Of course that makes no sense since it is a documentation error. Physically seeing the unit will not make any difference. But whatever. They have agreed to change the classification back to pre residential. But they also told me that "under no circumstances they will refund any past paid tax to me".
Does this really make sense? My residential home was mis classified by a mis-interpretation of a legal document by the tax department. This is a clear mistake. They took my money, tens of thousands of dollars worth. Can I get a refund? For the city official looking into this, the parcel ID is 0306395084 .
Update: See part two, the city called.