When buying or renting a home in Boston, property tax is an important factor to consider.

Even renters are indirectly affected because landlords typically pass on the property tax burden in the rent. Here's a breakdown of Boston's property tax structure and how the tax revenue is utilized.

In Massachusetts, property tax rates (Mill Rate or Tax Rate) vary by locality. In Boston, a split tax rate structure applies, with different rates for residential and commercial/industrial properties. Each year, the city's finance department determines the rates, with residential properties typically having a lower rate than commercial ones. The actual tax amount is calculated by multiplying the assessed value by the tax rate, and Massachusetts generally uses 100% of market value as the assessed value.

For Boston residents, the residential exemption is significant. This program allows a certain amount to be deducted from the assessed value of a home that the owner occupies, reducing the property tax burden for actual residents. To receive this exemption, residents must apply annually and submit documents to the Boston Assessing Department. This benefit does not apply to rental properties.

The total property tax revenue in Boston is used for citywide services such as education, public safety, fire services, transportation, and parks. Education accounts for the largest portion of the budget, with Boston Public Schools receiving a significant share of the city's overall budget each year. Boston also receives state government grants, including the Massachusetts Education Aid Fund (Chapter 70), which helps maintain public school funding. Massachusetts ranks among the top in the nation for public education investment, contributing to the overall quality of education in Boston Public Schools.

There are also property tax relief programs for seniors and low-income residents. Various programs, such as the Circuit Breaker Tax Credit for low-income residents over 65, disability exemptions, and veteran exemptions, are available, so be sure to check if you qualify. Relevant information can be found on the Massachusetts Department of Revenue or the Boston Assessing Department's website.