New Bedford tax sale helps collect ‘fair share’ of real estate taxes

June 15--NEW BEDFORD -- Ari Sky said he believes the city has turned a corner in suppressing its real estate tax problem.

The city's CFO pointed to more than $2 million generated either directly or indirectly from a tax sale hosted last month.

"I think we're really changing the dynamic," Sky said. "It's important for the city to be sustainable. People have to pay their taxes."

The city introduced the tax sale last year, where the city rounds up its real estate tax delinquencies and sells the debt to a private organization. That organization pays the debt associated with the property as well as the following year's taxes.

Last year, Tallage Lincoln LLC, a real estate investment firm in Boston, paid about $4 million to the city. This year, it received 145 parcels for $719,000 on May 12.

"Historically in the city without that backup (Tax Sale) people knew they could game the system," Sky said.

The city provides a 14-day notice that payment is needed after the tax deadline passes. Once the two-week window passes, the city notifies the owner that the property will be advertised as part of its tax sale.

Sky said the action has greatly increased payments from delinquent properties as evident by the sharp decline in the tax sale's first and second year.

"The problem was the city's tax pool became bigger and bigger of unpaid taxes," Sky said.

The notice that a property will be advertised as part of the tax sale is meant to act as an incentive for residents to pay what they owe.

The city arranges payment plans if necessary. It can even cut the interest owed by as much as 50 percent in some circumstances.

"The main objective is to make sure people pay their fair share," Sky said.

Not every delinquent property is advertised as part of the tax sale. Some properties aren't appealing to the private sector and other sites owe too much money, which is more important in the city's eyes.

As some resident start payment plans and other delinquent accounts are taken over by private firms, the city can then narrow it's focus on major accounts that owe the most.

"It's gradually keeping them more honest, and even in those cases they're starting to come to the table," Sky said. "Then we can go to court on the tough ones."

Follow Michael Bonner on Twitter @MikeBBonnerSCT.

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