The city's Department of Assessing issued new tax assessments for fiscal year 2015 to condo owners whose parking spaces are permitted to be sold to persons outside their building or complex. While this is part of an ongoing policy, one owner was unpleasantly surprised when his condo association notified him of the new assessment, prompting him to contact this newspaper to look into and clarify the practice. According to Assessing Department commissioner Ron Rakow, this situation applies to only a small number of Boston condo owners. "There are over 50,000 condos in city, and we are only talking about 1,000 condo units altogether, so it's a relatively small subset of the population," Rakow said in a telephone interview. He also emphasized that this is not a new form of taxation. "This isn't the first time we've done this. We've been assessing condo parking spaces separately for years. We have a process of looking at each case individually. We monitor the transactions on a regular basis, and on every transaction, we monitor sales price and make the assessments case by case." He added that his department worked with condo complex leaders to determine the need for new assessments and facilitate notification of affected property owners. "There were about six buildings this year in this program and we spent a lot of time earlier this year doing outreach to those people and making sure we get in touch with them," Rakow explained. The first bills for FY 2015, which began on July 1, were sent out some weeks ago and are due on August 1.

Rakow said that since most condo and parking space owners do not fit this situation, new assessments and tax bills are issued as-needed rather than at precise intervals. "As part of our regular business, we monitor sales of condo units and parking spaces, and issue assessments on parking spaces that are sold separately to non-residents." Rakow explained, "There are different ownership structures in place. In most cases where a condo complex has parking, each owner in the building is assigned a parking space for their exclusive use and in the vast majority of cases that is part of the tax assessment. Many condo complexes don't allow you to sell to outside residents. In some cases there is easement type parking, and in some cases some people have been selling their spaces to outside residents. Where parking spaces are allowed to be owned separately and sold to outside residents, then there is a separate assessment." For tax assessment purposes, "The main component is whether those parking spaces can be sold to people who live outside the condo complex where the parking space is located," Rakow observed.

Rakow asserted that the Assessing Department made an effort to work with condo complex leadership to ascertain where new parking assessments are warranted and to give the leaders time to inform affected residents. "This is a situation where before we made any decision, we reached out to condo associations and buildings and made an informed decision whether we should send out a new assessment." Rakow clarified that condo owners who are allowed to sell their parking spaces to outsiders are receiving the assessments regardless of whether they actually decide to sell the space this year.

In terms of income to the city, Rakow said, "In many respects it is revenue neutral because the value was with the unit before. When we created a separate parcel it was included with the unit." He continued, "We want to make sure that all the parking spots out there are being taxed and that we are assessing that tax to the correct property. If someone decides to sell their space to someone outside the building, we want to monitor that and tax the property and assess it to the correct person."

A condo owner who just received one of these assessments for the first time responded to his new tax levy, writing, "This situation doesn't seem fair. Our parking spaces were already reflected in our condo purchase prices and in all condo purchase prices throughout the neighborhood.  By assessing parking spaces separately after the fact without reducing underlying condo assessments and tax bills, the city is effectively taxing parking owners twice for the same thing, and it's even worse if this is not being done to all parking space owners uniformly."

Parking spaces have become increasingly valuable properties as development and demand for parking grow, with both rental and sales prices soaring in recent years. Rakow said that assessments depend on a number of factors, such as whether the space is outdoors or indoors and separate or tandem, and the neighborhood where the space is located. Values range mid $30,000 to mid $50,000 range, with spaces in the Back Bay and South End among the highest in the city, much more than in areas such as Hyde Park and Charlestown.