What is Proposition 2 ½?
Proposition 2 ½ is a Massachusetts law enacted in 1980, and went into effect in FY1982, that strictly limits the amount of property tax revenue a municipality can raise through real and personal property taxes. Proposition 2½ revolutionized property tax administration and is a fundamental feature of the Massachusetts municipal fiscal landscape. For more information, this video explains how Proposition 2 ½ works.
Proposition 2 ½ and the levy limit
- Levy Limits: A Primer on Proposition 2 ½ (PDF)
- A Detailed Look At Proposition 2 ½ for assessors: Interactive video | PDF printable handbook
- What is Proposition 2 1/2? (Video)
- What is a Levy Limit? (Video)
- What is New Growth? (Video)
- What is a Levy Ceiling? (Video)
- How can a community levy above its levy limit/ceiling? (Video)
- What is a Proposition 2 1/2 Override or Underride? (Video)
- What is a Proposition 2 1/2 Exclusion? (Video)
- What's the Difference Between an Override and an Exclusion? (Video)
- is Excess Levy Capacity? (Video)
- IGR 2024-15 Fiscal Year 2025 Guidelines for Determining Annual Levy Limit Increase for Tax Base Growth
- Proposition 2 ½ Ballot Questions – Requirement and Procedures (PDF)
- Reports related to Proposition 2 ½
- Residential to CIP Shift Calculator
- Submitting Proposition 2 ½ Votes Using DLS Gateway Webinar (Video)
This video reviews each step of the process, and provides a brief demonstration on how to submit proposition 2 ½ votes using DLS Gateway. You can view the PowerPoint slides here (PDF). - Tax Impact Calculator (databank report)
- How Can a Community Exceed Its Levy Limit or Ceiling? (Video)
- Guidelines: Premiums and Surplus Proceeds for Proposition 2½ Excluded Debt (PDF) This Informational Guideline Release (IGR) explains to local officials the adjustments made to a Proposition 2½ debt exclusion when premiums are received in connection with the sale of the bonds or notes for the excluded borrowing and surplus loan proceeds remain after the purpose of the borrowing is completed.
Setting the property tax rate
- A Detailed Look at Setting the Tax Rate: Interactive video | PDF printable handbook This video and PDF explain how Massachusetts cities and towns calculate property tax rates based on their property values and budgets.
- Completing the Tax Rate Recap Forms Presentation (PDF)
- Completing the Tax Rate Recap Forms Webinar (Video)
- IGR 2024-14 Fiscal Year 2025 Guidelines for Annual Assessment and Allocation Of Tax Levy
This Informational Guideline Release (IGR) provides information regarding the annual determination of property assessments, classification of property, calculation of the minimum residential factor and allocation of the tax levy among the property classes. - Mining DLS Property Tax Data for Classification Hearings Webinar (Video)
- Property Tax Billing and Billing Schedules (Video) This video provides a walkthrough of the quarterly and semi-annual tax billing processes and highlights some of the integral components to ensuring tax bills are issued timely.
- Reports relating to municipal property tax data and tax rates
- Local Options Report: options adopted by cities and towns that impact property tax
- Residential Exemption Calculator (Databank Report)
- Tax Impact Calculator (Databank Report)
- The Annual Property Tax Roll (Video)
- These shorter videos highlight specific aspects of setting the tax rate:
- IGR 2017-23 Overlay and Overlay Surplus
This Informational Guideline Release (IGR) generally explains the statutory standard for maintaining an adequate overlay and the actions the Commissioner of Revenue may take when approving a tax rate or determining available funds to ensure compliance with that standard.
Determining property values
- DLS Gateway for Assessors Webinar (Video)
- Assessment Administration: Interactive video | PDF printable handbook This video and PDF explain the data and record keeping requirements involved in property assessment and valuation.
- Assessment of Personal Property: Interactive video | PDF printable handbook
- Assessment Records and Reports (Video)
- Assessment Unit Concepts: Property Definitions (Video)
- Assessments, Abatements and Appeals: Interactive video | PDF printable handbook
- IGR 2024-13 - Certification Standards: Guidelines for Development of a Minimum Reassessment Program
This Informational Guideline Release (IGR) provides guidance to local assessors on the minimum standards of assessment performance their proposed property valuations must meet for the Commissioner of Revenue to certify they are assessing at full and fair cash valuation. - Classifying Land Under Chapters 61/61A/61B: Frequently Asked Questions
- Farmland Valuations Information related to the valuation of farmland classified as agricultural, horticultural or forest land under Chapters 61 and 61A.
- IGR 2021-17 - Valuation and Taxation of Electric Generating Facilities (PDF)
This Informational Guideline Release (IGR) provides local officials with information about the valuation and taxation of electric generating plants and facilities. - LFO: LFO 2022-1 Exemption Eligibility for Electric Generating Systems When Situated on Property Owned by A Governmental Entity
This Local Finance Opinion (LFO) examines exemption eligibility for electric generating systems when situated on property owned by a governmental entity. - IGR 2017-10 Omitted and Revised Property Tax Assessments
This Informational Guideline Release (IGR) provides guidance to local officials about the requirements and procedures for making omitted and revised assessments. - Mass Appraisal and Sales Concepts: Interactive video | PDF printable handbook
- Mass Appraisal Webinar: This DLS-hosted webinar provided an overview of mass appraisal, the standardized procedures for collecting data and appraising property to ensure that all properties within a municipality are valued uniformly and equitably. You can view the slides presented during the webinar here.
- Personal Property Frequently Asked Questions (PDF)
- Property Ownership Concepts: The Assessed Owner (Video)
- The Annual Property Tax Roll (Video
Property classification and its impact on taxation
- LA-3 – Best Practices, Processes and Sales Code Review Presentation (PDF)
- LA-3 – Best Practices, Processes and Sales Code Review Webinar (Video)
- Classifying Land Under Chapters 61/61A/61B: Frequently Asked Questions
- Classifying Land Under Chapters 61/61A/61B: Requirements and Tax Benefits
- IGR 2024-14 Fiscal Year 2025 Guidelines for Annual Assessment and Allocation Of Tax Levy
- Property Tax Classification: Classifying Property for Tax Purposes: Interactive video | PDF printable handbook
- Property Type Classification and Sales Verification Codes (PDF) These Guidelines are intended to assist the Board of Assessors in determining the proper classification of property according to its use.
Valuation growth ("new growth")
- IGR 2024-15 Fiscal Year 2024 Guidelines for Determining Annual Levy Limit Increase for Tax Base Growth
- New Growth in the Tax Base Under Proposition 2 1/2 (Video)
- Tips for Assessors: Reporting value growth to DLS
- Tips for Assessors: Using the New Growth Reporting Template (Video)
- What is New Growth? (Video)
Property Tax Abatements
These modules provide an overview of abatements, assessors’ powers to abate property taxes, and the role of the Appellate Tax Board.
DLS guidance for issuing property tax bills
- IGR 2024-8 Fiscal Year 2025 Tax Bills Quarterly Payment System (PDF)
- IGR 2024-9 Fiscal Year 2025 Tax Bills Semi-Annual Payment System (PDF)
- IGR 2024-10 Fiscal Year 2025 Tax Bills Semi-Annual Payment System – Annual Preliminary Bills (PDF)
- IGR 2024-11 Fiscal Year 2025 Tax Bills Semi-Annual Payment System – Optional Preliminary Bills (PDF)
- IGR 2017-09 Single Property Tax Bills
This Informational Guideline Release (IGR) describes the local option statute cities and towns can adopt to make property tax bills of $100 or less payable in a single installment. - IGR 2017-11 Apportionment of Real Estate Taxes
This Informational Guideline Release (IGR) explains an amendment to the procedure for apportioning outstanding taxes when real estate is divided by a recorded sale, mortgage, partition, transfer or other change in ownership. - IGR 2017-10 Omitted and Revised Property Tax Assessments
This Informational Guideline Release (IGR) provides guidance to local officials about the requirements and procedures for making omitted and revised assessments.
Property Tax Exemptions
- IGR 2024-7 Social Security Deduction for Fiscal Year 2025 (PDF)
- IGR 2024-6 Optional Cost of Living Adjustment For Fiscal Year 2025 Exemptions (PDF)
- IGR 2019-13 Property Tax Exemptions to Promote Economic Development, Affordable Housing, Workforce Housing and Manufacturing Workforce Development
This Informational Guideline Release (IGR) explains the implementation of property tax exemptions available under the Economic Development Incentive Program (EDIP) and parallel programs to promote affordable housing in urban centers, manufacturing workforce development and construction of middle-income housing. - IGR 2017-19 Clause 22F Property Tax Exemption for Paraplegic and Blind Veterans
- IGR 2017-12 Clause 41C½ Property Tax Exemption for Seniors
This Informational Guideline Release (IGR) updates the standards and procedures that apply to the local option Clause 41C½ property tax exemption for seniors. - IGR 2017-18 Clause 22D Property Tax Exemption for Surviving Spouses of Active Duty Personnel and Veterans
- Property Tax Exemptions for Organizations: Frequently Asked Questions, (PDF)
- Property Tax Exemptions: Interactive video | PDF printable handbook This video and PDF describe the various property tax exemptions available to certain individuals, organizations and governments.
Personal Property
- Assessment of Personal Property: Interactive video | PDF printable handbook
- Exempt Property and Accounts (Video)
- Individual and Unincorporated Entity Exemptions (Video)
- Personal Property Frequently Asked Questions (FAQs), (PDF)
- Tax Administration of Personal Property (Video)
- Using the Corporations Book to identify corporate entities entitled to exemptions (Video)
Trainings, tools and data
| Date published: | July 30, 2020 |
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| Last updated: | July 12, 2021 |