Guide Massachusetts Property Taxes

For many cities and towns, property taxes are the largest funding source for teachers, police, firefighters, public works like trash pick-up, and many other local resources and services.

The Department of Revenue (DOR) does not and cannot administer, advocate, or adjudicate municipal taxpayer issues. This guide is not designed to address all questions which may arise nor to address complex issues in detail. Nothing contained herein supersedes, alters or otherwise changes any provision of the Massachusetts General Laws, DOR Regulations, DOR rulings or any other sources of the law.

Table of Contents

What is property tax?

Property tax is an assessment on the ownership of real and personal property. An owner’s property tax is based on the assessment, which is the full and fair cash value of the property.

Each year, local assessors in every city and town in Massachusetts have a constitutional and statutory duty to assess all property at its full and fair cash value under Massachusetts General Law. As of each January 1st, local assessors must classify all real property according to use into one of four classes:

  • Residential
  • Open space
  • Commercial
  • Industrial.

Please notePersonal property is a separate category and is treated as a class for purposes of allocating the tax levy.

The tax rate for a property is determined by the assessed value in relation to its share of the overall property tax levy.

To learn more visit the Learn about Property Taxes video

What is a levy?

The levy is the overall amount of revenue a city or town raises through the property tax. It’s divided by the total assessed value of all properties.

In order to make sure everyone pays their fair share, property is valued by a local assessor who determines the full and fair cash value of all the property in that city or town by performing data reviews and site visits. Local assessors factor in all variables including:

  • What the property is used for
  • Location
  • Size of the lot and
  • Building size

If your local assessors determine that the prior year’s assessed valuations no longer reflect a certain value because of changing market conditions, they have a legal duty to reassess accordingly.

Does everybody pay the same tax rate?

Before 1978, they did. Now, depending on the city or town, classification allows for the shifting of a portion of the tax burden of residential property onto:

  • Commercial 
  • Industrial and
  • Personal property.

Although some businesses may pay more than residences in some places, the total tax levy for the city or town remains the same.

Exemptions

An exemption is a release or discharge from the obligation to pay all or a portion of a local property tax. DOR's Division of Local Services has developed taxpayer guides to real estate tax exemptions in Massachusetts for:

As well as real estate tax deferrals:

Visit Property Tax Exemptions for more information on property tax exemptions, including the required processes for taxpayers and local assessors. 

Abatements

An abatement is a reduction in the amount of a committed tax. It is (1) a taxpayer remedy for overassessment or to claim exemptions and (2) an accounting mechanism to clear a municipality’s books of uncollectible taxes. A taxpayer may apply for abatement for the following reasons:

  • Overvaluation – The taxpayer disagrees with the local assessors' appraisal of the fair cash value of the property or believes the valuation reflects a data or other error.
     
  • Disproportionate assessment – The taxpayer believes that the property is valued at a higher percentage of fair cash value than other properties due to an intentional, discriminatory assessment policy.
     
  • Misclassification of real property – The taxpayer believes the property is not properly classified and the community has multiple tax rates, e.g., the property should be classified as residential, not commercial, and be taxed at the lower residential rate.
     
  • Statutory exemption – The taxpayer believes an exemption applies based on the ownership or use of the property.

Visit Property Tax Abatements for more information on the abatement process including the necessary processes for both taxpayers and local assessors.

What is the Appellate Tax Board?

If a taxpayer has properly applied for an abatement with the local assessors and wishes to appeal their decision, an appeal can be filed with the Appellate Tax Board (ATB). The Appellate Tax Board is a state administrative agency that hears taxpayer appeals on local and state tax matters. The ATB can only hear and decide an appeal if the taxpayers have complied with certain procedural steps.

What is the role of DOR?

Under current law, DOR reviews the overall assessing practices of each city and town every five years to determine whether they generally result in assessments of fair market value. During that review, appraisal staff from the Bureau of Local Assessment will analyze:

  • Recent property sales
  • Appraisal methods and
  • Overall community valuations developed by local assessors.

These standards must be met to receive DOR's property assessment certification.

For more information visit IGR 2019-8 Certification Standards – Guidelines for Development of a Minimum Reassessment Program.

DOR also ensures compliance with Proposition 2 ½. The law sets limits on property taxes and is a fundamental feature of the Massachusetts municipal finance landscape

For issues related to individual property tax bills, please contact your city or town. To learn more general information about property taxes, please visit the Division of Local Services.

What is Prop 2 ½?

Proposition 2 ½ revolutionized property tax administration and is a fundamental feature of the Massachusetts municipal fiscal landscape.

Visit Proposition 2 ½ and Tax Rate Process to learn how:

  • Proposition 2 ½ limits the property tax
  • The levy limit is calculated
  • An override differs from a debt exclusion or capital outlay expenditure exclusion, and
  • New growth works.

This guide was last updated on November 5, 2019.

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