- Landlords in downtown Boston filed 388 commercial property tax appeals this year, an 83% jump from 2024. Only 11 were approved.
- Office vacancies have climbed to nearly 19%, driving foreclosures and steep price cuts. Landlords say assessments still overstate property values.
- A Tufts-Boston Policy Institute report warns the city could lose $1.7B in tax revenue over five years if values keep falling.
A Wave Of Appeals
Boston office owners, facing heavy vacancies and plunging prices, are pushing harder to cut their tax bills. Bloomberg reported that landlords filed 388 commercial property appeals this year, up from 212 last year and 180 in 2023.
Bisnow says that so far, relief has been rare. The city granted just 11 appeals by July. One win came for KS Partners, which secured a $2M reduction on a $14.2M assessment for its two-thirds vacant Court Square property.
Market Pain Runs Deeper
“The values have been decimated,” KS Partners founder Kambiz Shahbazi told Bloomberg. He said the 12% drop in assessed values across his portfolio doesn’t reflect the far larger losses in the market.
Nationwide, office values have plunged 37% since 2022 peaks, according to Green Street. Boston’s office vacancy hit 18.8% last quarter, rising from 14% in mid-2023 and less than 8% before the pandemic, CBRE reported. Properties like One Lincoln have sold in foreclosure auctions for less than half their previous price.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Fiscal Stakes For The City
Property taxes account for more than 70% of Boston’s local revenues, so falling values threaten city budgets. A June report from Tufts and the Boston Policy Institute projected office assessments could drop by 45% from 2024 levels, cutting tax collections by $1.7B over five years.
Mayor Michelle Wu proposed raising commercial tax rates to shield residents from higher bills. The plan stalled in the state legislature last year after business groups opposed it. She refiled the proposal in January, but lawmakers have not advanced it.
Why It Matters
Landlords face higher vacancies, lower values, and little tax relief. For Boston, the bigger risk is a shrinking revenue base that could force tough budget decisions unless the state clears a path for Wu’s proposal.
