Local residential and commercial tax rates vary considerably by town.
With the 2008 recession, town equalized valuations took a hit. As a result, town tax rates increased to provide the steady Proposition 2 1/2 increase each year.
However, as some towns saw real estate increases post-2010, their tax rates again began to decline. Other towns were not so fortunate, and either continued spending expansion at rates beyond real estate growth, or did not see as much economic recovery. Those towns have tax rates which continued to increase after the economy stabilized.
Select a town and see how it’s tax rate has changed over 15 years.
(Warning: 15 cities & towns have residential tax exemptions; so the tax rates and estimated tax costs are not correct for these municipalities. We are working to correct this but there is not a straigtforward data source on the exemption amount. These include: Boston, Brookline, Cambridge, Chelsea, Everett, Malden, Somerville, Waltham, Watertown, Barnstable, Nantucket, Provincetown, Somerset, Tisbury and Truro. Tax rates in these jurisdictions are well below figures represented here.)
The figure below shows tax rates applied to an example property, set at $1,000,000 assessed value to have a round working figure. While these charts may give the impression of falling tax rates, it should be noted that property values increased significantly in many municipalities and therefore the average single family tax has increased (shown on a separate page). This figure is shown to provide a perspective on how total tax bills differ by location when buying a comparable property.
Some towns (such as Arlington) set commercial and residential taxes at similar levels, while other towns (such as Lexington) have significantly higher commercial tax rates.
State law limits the extent to which commercial tax rates can exceed residential tax rates. The CIP “factor” has a limit of 1.5 or 1.75 depending on characteristics of the town’s tax base. This factor determines the extent to which the commercial tax rate can exceed the residential tax rate. Each town has an annual tax classification exercise where this rate is set.