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From a Press Release from Gardner MA Mayor Michael Nicholson: “According to Massachusetts General Law and the restrictions of Proposition 2 ½, the City cannot raise taxes more than 2 ½% each year. For the current fiscal year, the total amount of property taxes that Gardner can collect is $31,271,792.” Read the entire Press Release.

Tax Inversion Illustration

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City of Gardner MA Hit With Tax Inversion Phenomenon, Confusing Taxpayers

If conditions are ideal, a City’s Real Estate tax rate set by the City Council is fairly accurate, with preliminary 1st and 2nd quarter bills usually being somewhat lower than the final bills for 3rd and 4th quarter.  However, due to state-mandated calculations, this time around, the Chair City gets stuck with a Tax Inversion.  

The Problem

Instead of being able to immediately lower the tax rate per $1000 of valuation to compensate for the higher valuations of calendar year 2021, Gardner is forced by State law to send out the bills with both the already approved tax rate AND the higher valuation.  The Result:  Tax Inversion, where the bills for 1st and 2nd quarter are higher than expected.  Good News: 3rd and 4th quarter actual real estate tax bills get adjusted so that the total you pay for the year is accurate.   Conclusion:  You pay more now, but pay less later. 

More Information

Note:  This is the first time Tax Inversion has hit Gardner since 2006.  It’s because the average house prices in calendar year 2021 went up a lot.  Help: If this situation presents a financial problem, don’t worry, the City of Gardner will work with you.  Local Resources:  The best place to get questions answered regarding your Gardner MA Real Estate taxes is the Treasurer/Collector office.   Here is a link to the website page.

Future Tax Rate

Future Tax Rate: Once New Growth, Free Cash, etc. is certified by about November/December of 2022, the Gardner City Council is allowed to adjust the tax rate to compensate.   The last two quarters get adjusted, and the universe goes back into balance.  Tax Levy Limited:  Remember, Gardner can’t tax more than a certain amount for the year due to Prop 2 ½, so you can be sure the adjustments will be made at the appropriate time.  This may be inconvenient, but it all gets worked out in the end.

Understanding the Issue

The State of Massachusetts has a guide to Municipal Property Taxes.  CLICK HERE.   You can also read the actual State Law which restricts how Cities and Towns in Massachusetts can handle the situation.  CLICK HERE.    A third party site, Smart Asset, explains how property taxes vary throughout Massachusetts and some other interesting related tidbits. CLICK HERE.

Conclusion

While it can be a shock to get an unexpectedly high bill given current worries about inflation, the transparency of Gardner City Hall on this issue and its willingness to work with taxpayers should relieve some stress.