Growth in the value of residential property outpaced that of commercial property in Bedford through the COVID era, and residential property makes up the vast majority of overall property value in town.
Almost 80% of property value, more than $5.1 billion across 7,142 parcels in Bedford is residential. Commercial properties make up about 12% of value, or just over $784 million across 458 parcels. Another 4% comes from industrial parcels.
“The commercial makeup still is a small percentage of our total value,” Doug Irvine, the town’s chief assessor, told councilors during their meeting on July 15.
The largest commercial category by total valuation is apartments, at $211,082,100, followed by office buildings at $161,150,143.
“We have a lot of large office buildings in Bedford, and we have several office parks,” Irvine said. “Manchester, by contrast, has a lot of office buildings. They don’t have a lot of office parks, but we tend to do that — and I’m talking 50,000-square-foot and bigger — for our size of community we have our fair share, for sure,” Irvine said.
Irvine came before the council to discuss property assessments and how mass appraisals are conducted. Mass appraisals are the simultaneous revaluation of all properties within a municipality. New values are developed using information about market sales, replacement costs and income analysis, as appropriate.
The commercial development Market and Main is valued at $25,476,217, in total. Trader Joe’s, Tavern in the Square, Sephora and REI are the most valuable of the businesses there, but the whole package represents just 0.0004% of the town’s total valuation.
“The owner of the property is taxed on the property. The leases may vary in terms of, are the tenants paying a portion of those taxes, or do they pay all of the taxes?” Irvine said. “In what’s called a ‘tripe net’ situation, you would as the tenant be responsible for everything, including all the taxes, so that varies.”
Further, property devaluation is only addressed during revaluation. For a brand-new, residential home, the assessor lists it as 100% complete. Typically, such properties depreciate at a rate of about 1% per year. Increases in valuation are often attributed to the land, not to the structure.
“The assessment will be made up of the building, the improvement and the land, in most cases,” Irvine said.
High-priced homes are a much larger contributor to taxes than commercial, generally.
“We saw an increase from 2021 to 2023 that’s unprecedented,” Irvine said.
Irvine described a significant contrast between increases in residential value in the market and that of commercial over the same period.
“I think that’s where everyone has a hard time, grasping that, that their home value went up but commercial properties didn’t,” said Chairman Phil Greazzo.
As for the question that, with those dynamics in mind, a town can utilize different tax rates for commercial and residential properties?
“The answer is no,” Irvine said. “New Hampshire is a single tax rate state; there’s not legal mechanism that allows for multiple tax rates for various property types or classes.”