Home Buying in Massachusetts>Question Details

Lisa, Home Buyer in Boston, MA

How are property taxes determined in Massachusetts (specifically Boston's Metro West area)?

Asked by Lisa, Boston, MA Wed Feb 25, 2009

Our family is considering a move from California, where the property taxes are determined by the purchase price of the house. That doesn't appear to be the case in MA, and we are trying to get a handle on what our housing costs might be.

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4
Hello-

I have a friend in California, and if I understood him correctly, the taxes in California reward patience, i.e., they stay the same based on the purchase price based on the period of time you live in the house! Others have answered the bulk of the questions here, but just remember in MA, the taxes change every year. Oh, and by change, I mean "go up", although I'm sure there are a few exceptions to that. Fortunately, this system does moderate the increases somewhat.

Best-

Matt Heisler
Web Reference: http://www.bjheisler.com
0 votes Thank Flag Link Fri Feb 27, 2009
Property tax is a percentage of the assessed value of a property. The assessed value is determined by city/town assessor and is usually calculated on the market performance of two year's prior. Adjustments are made for renovations and new construction and a property owner can file for an abatement within twenty days of receiving the tax bill (usually at the beginning of the year) and get an adjustment. (How quickly the process moves depends on the city or town).

What the tax rate (percentage of assessed value) is does in fact get set each year by the local municipal government. But it is not as arbitrary as it seems. The officials are restricted by proposition 2 1/2. However, it may still seem arbitrary to many people.

Details on Prop 2 1/2
The factor of 2 1/2 % comes into play in two ways.

1. It's a ceiling A city or town may only collect, AT MOST, the equivalent of 2.5% of the taxable property value in the city or town. For instance, a town that has real property value of approximately 6,000,000,000 can only collect a MAXIMUM of $150,000,000 in taxes.

2. It's a cap on increase. A city or town may only INCREASE it's taxable income by 2.5% of the taxable properties minus new growth. Tax on new growth is all increase to the tax base. So, if that same town that can not collect ore than $150,000,000 in taxes .. ran on $100,000,000 dollars, may only collect $102,500,000 the next year + new growth. The burden of that $102,500,000 of taxes is then divided proportionally across all the taxable properties in the city (given one rate for Residential and another for Business). Residential properties are assessed based on "market price" of two years prior. Business properties are assessed based on their revenues and then taxed (often at a higher rate than residential tax).
Web Reference: http://www.commonmoves.com
0 votes Thank Flag Link Wed Feb 25, 2009
Here, in good old New England, we pay taxes on what the town deems our property to be worth. Now that values are lower than in years past, we are paying a bit more in taxes than our homes would sell for. In the past sellers market, our taxes were lower than our values. In a transitional market we will pay somewhere in between. I know it's confusing but taxes tend to be relative to the market we're in. You can find out the taxes in any town you have interest in. If lower taxes are the most important, pick your town accordingly. If school systems are your priority check out the MCAS scores for towns in your preferred area of Massachusetts. If you would like me to send you some listings in my area, email me at cheryl.cairns@century21.com
0 votes Thank Flag Link Wed Feb 25, 2009
The tax rate and the accessed value are determined by the city or town.
0 votes Thank Flag Link Wed Feb 25, 2009
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