Real estate taxes vary from town to town in the greater Boston Area. We’re going to take a look at Boston Proper and some of the immediately adjacent municipalities to compare the tax rates. But first, we’ll answer some questions about the terminology.
How are the real estate taxes on my home determined?
The assessed value of your home is multiplied by the residential tax rate for the fiscal year to calculate your taxes for the year. As an owner occupant, you are entitled to a residential exemption if (1) your town has such an exemption, and (2) you applied for the exemption by the deadline for the current tax year.
What is real estate “assessed value”?
Real estate assessed value is the value of your home for tax purposes, as determined by the City of Municipal Tax Assessor Department. It is adjusted annually based on home sales in general, and events related to your property in particular. If you purchased your home recently, the purchase price records will be taken into consideration. (But, your house will not be assessed at the price you paid – it is only one factor.) Similarly, if you took out a building permit to do a significant renovation that affects the value of your home, that is also taken into consideration. (No, this doesn’t apply to maintenance projects that also require building permits such as plumbing repairs.)
What is the residential real estate “tax rate”?
Every year the local government develops a budget for the following year, and determines the total amount of income they need to generate from residential real estate taxes. Then, they calculate how much tax they need to collect per thousand dollars of assessed value in order to generate the needed budget amount.
EXAMPLE: If the assessed values of all the houses in the city total $300 million, and the city needs $6 million from residential real estate taxes for this year’s budget, then every $1000 of residential assessed value in the whole city would be taxed $20. In other words, the tax rate for this year will be $20 per $1000 of assessed value. It works! If you multiply the tax rate of $20 per $1000 of assessed value, by $300 (the number of $1000’s of assessed value total in the city) you get the targeted $6m. And, if your home is assessed at $520k, then your taxes for the year would be $520 x $20.00 or $10,400.
What is a “residential exemption”?
Some municipalities give an abatement or exemption if you live in your house rather than renting it out. They abate – or lower – the amount of the assessed value to which they apply the rate for owner occupants. In our example, if they abate the assessed value of every owner occupied house by $55,000, then every owner occupant would save $55 x $20, or $1,100 for the year. With an abatement applied to your house assessed at $520k, instead of paying $10,400 for the year, you would pay $1,100 less or $9,300 for the year.
Residential Taxes 2019 Greater Boston Area
MUNICIPALITY TAX RATE (per $1000) OWNER OCC EXEMPTION
Boston Proper** $10.54 $2,719
Brookline $9.37 $2,593
Cambridge $6.29 2.232
Chelsea $14.25 $1,897
Everett $12.38 $1,468
Medford 9.60 N/A
Newton $10.45 N/A
Quincy $12.55 N/A
Somerville $10.76 $3,105
Winthrop $13.18 N/A
**Includes: Boston proper neighborhoods, and Brighton, Charlestown, Dorchester, East Boston, Hyde Park, Jamaica Plain, Mattapan, Roslindale, South Boston, and West Roxbury.
This brief survey gives you a snapshot of the greater Boston area residential tax rates for 2019. Bear in mind that you can compare two towns, and the one that has a lower tax rate can have more aggressive assessments and/or more expensive property, resulting in higher tax payments.
Although this post also gives you some basic information about real estate taxes, it is a good idea to go on-line to the tax assessor’s website for your town. The fiscal years which determine the timing and payment of taxes are not the same as the calendar year. There can also be lags such as getting the old owner off the tax records and getting your name on the records when you buy. And there are a host of deadlines for applying for abatements, examptions, etc, in addition to those for paying your taxes mentioned above.
Chris Kostopoulos can help you with buying and selling property. He can certainly answer questions about appraisals or refer you to a tax specialist for specific situations. You can contact Chris by phone at 857-829-0282 or email him at Chris@Isellmass.com