Boston assesses building that sold for $1.6 million as worth only $332,000

Commercial properties are not assessed based on resale values like residential property. They are assessed based essentially on a multiple of net operating income (rents less expenses not including debt). From the picture - this structure is essentially worth zero - even if the underlying land sold for 1.6 million - the value is thus only on the land which is taxed at very low rates. I don't know all the details - but the assessing dept is probably in the ballpark on this one based on the law (also - even if they assessed it at $36,000 - it won't add a single dollar to the city's coffers under prop 2 1/2 - common misconception - the only advantage is that other taxpayers might see about a fraction of one cent lower taxes).

The bigger problem is what is going to happen to the commercial office buildings - the 200 largest buildings in the city pay about half the city's commercial property taxes. However, with rents down and vacancies and interest rates up this puts a double whammy on commercial property values. As I've commented before - if commercial taxes paid decrease about 10% (roughly $90 million)the taxes don't go away - the residents will have to pick up that slack - translating to a 20% or so increase in residential taxes (without getting into the math - maybe 25% for the average person getting the residential exemption). The property tax system in this city is a ticking time bomb and our city government is doing nothing legislatively or financially to diminish this risk - willing to rely on the boiling frog theory that they will be out of office by the time it becomes a serious problem. When I moved here 16 years ago our taxes were almost ridiculously low - now they are on par with the suburbs and will be moving up rapidly if we don't overhaul the system and soon.