Updated: Feb 26, 2021
In Massachusetts, every town assesses tax on every residential and commercial property based on assessed value. This value is typically determined once per year, so if there are changes in value during the year, the assessed value may be lower than the current market value of your home at any given point in time.
What is the money used for?
The money raised by charging these taxes is to satisfy the budget requirements for the town each year to run and service the town. All public facilities and services provided by the town such as building and maintaining roads, snow removal, police and fire departments (if not volunteer), government etc. are all financed via these taxes. One of the largest expenses is typically the school system which benefits families with school age children directly (more money usually means better facilities and schools) and every other homeowner indirectly (better long term resale value).
Example: Marlborough, Massachusetts
In 2020, the tax rate for Marlborough, MA was $14.18 per $1000 of assessed value for residential properties
The assessed value is based on the recent sale of comparable homes, similar to the analysis that a REALTORⓇ may perform for a selling looking to determine their listing price.
So, if your home is assessed at $400,000, your taxes for the year would be:
($400,000 x $14.18)/1000 = $5672/year
What are taxes used for?
The overall budget required to run the town and all the services required are what drives both the assessed value and the actual tax rate.
Will my taxes go up?
Probably. Expenses for salaries and services generally go up so the town budget goes up and therefore your taxes go up. Towns that have a large commercial base, have significant revenue from corporates and retail outlets that may help reduce the overall taxes in a town that is purely residential. The proposed FY20 budget for Marlborough went up 3.8% which caused an expected 3% increase in real estate taxes. The reason they are not equal, is that the town has several other sources of revenue (State Aid etc.) Here is a chart showing how taxes have gone up the last five (5) years.
Can I have my taxes reduced?
Maybe. You have the right to file an abatement with the Board of Assessors. Abatements can be filed for thirty days following the mailing of the first tax bill of the fiscal year usually during the month of January.
Per the Marlborough Web Site - https://www.marlborough-ma.gov/assessors-office/faq/how-do-i-file-abatement
"The Board of Assessors looks for persuasive evidence before changing any assessment. Applications should include a complete description of factual errors. For example, errors in number of baths, year built, square footage of living area, etc. Factual errors usually require a site visit. Or, if you believe your property is over-assessed, provide an analysis of comparable sale properties with your abatement application. The analysis should include at least recent sales of homes that are similar to yours in characteristics such as style, living area, number of bedrooms, lot size and location. Property record cards are available to support your claim."
Everyone has to pay taxes in Massachusetts on their property, so make sure to consider this expense when you are planning your budget. Taxes may be rolled into your mortgage and held in escrow by your lender or you may have to pay them directly, but either way, we all pay taxes!
Stay Real Informed!