FY20 Property Taxes
In FY20, the net property tax levy is estimated to total $2.44 billion and account for 70.9% of budgeted recurring revenues.
Thanks to a surging economy and smart policies implemented by Mayor Walsh, property values in Boston continue to rise steadily. In FY18, property values increased by $10.0 billion (6.9%), and in FY19, property values increased by $10.6 billion (6.9%), currently totaling $164.5 billion.
Tax Share and the Tax Rate
Residential properties have accounted for an average of 39% of the total tax levy since FY06. In FY19, residential tax payers account for 39.5% of the total tax levy and commercial, industrial, and personal properties account for the remaining 60.5%.
Classifying properties by residential, commercial, and industrial categories reduces the residential tax rate, the rate per thousand dollars of property value, to the lowest level allowed by law. Without it, residential taxpayers would see their properties taxed at a much higher rate. As can be seen in the graph to the right:
- Rates Increased in the years following the Great Recession (FY08-FY13), when property values decreased significantly due to the burst of the housing bubble.
- Starting in FY14, rates have decreased thanks to the acceleration of development and the recovery of the economy.
- In FY19, the residential tax rate is $10.54 for every one thousand dollars of value. Commercial, industrial and personal rates are $25.00 for every one thousand dollars.
Property Tax Rates
Proposition 2 1/2
Property Tax Levy and Levy Ceiling
Due to years of strong new growth increases, the City has some space between its FY19 net effective tax rate of 1.43 percent and the tax levy ceiling of 2.5 percent of total assessed values.
Proposition 2 ½ was enacted in 1980 by voter initiative, to constrain and limit the annual property tax levy in Massachusetts cities and towns. The law includes two types of limits:
- The Levy Limit - Each year, the City can raise its tax levy by up to 2.5 percent over the previous year’s levy limit. New growth, which represents additions to the City’s tax base over the previous year, is added to the levy as well.
- The Levy Ceiling - The tax levy cannot exceed 2.5 percent of the total assessed value of all real and personal properties in the City.
To learn more about tax collection and assessments in Boston, please use the following resources:
Property Tax Levy Increase by Type
Property tax growth from new growth has exceeded growth from the allowable 2.5 percent increase in 24 of the last 35 years.
FY19 and FY20 are budget amounts.
During the past three years, the City saw notable construction projects in Boston enter the City property tax base for commercial, mixed-use, and residential properties. During FY19, the City added 1,295 residential condominiums units in all neighborhoods throughout the city.
New growth averaged $76 million between FY17 and FY19, with new growth projected to total $60 million in FY20. However, as was evident during the last recession, new growth revenue is volatile, and depends on the development cycle and the local, state and national economies.