DLS report: Residential tax bills continue upward trend

The average single-family residential property tax bill has increased in each of the past 10 years in Massachusetts, reaching $5,044 in fiscal 2014, according to a March 20 report from the Division of Local Services.

The average tax bill increased by $198 (4 percent) between fiscal 2013 and 2014. The percentage annual increase over the past 10 years has ranged from a low of 2.9 percent in fiscal 2013 to a high of 5.9 percent in 2006. The cumulative percentage increase in residential property tax bills over this 10-year period is 40.6 percent.

Fourteen towns have average tax bills in excess of $10,000 in fiscal 2014. Twelve years ago, no community had an average bill over this mark.

Proposition 2½ limits the growth of the municipal property tax levies to 2.5 percent, but allows for additional increases due to new growth, ballot votes that increase the levy limit, and the use of excess taxing capacity.

Analysis of the statewide average residential tax rate shows a steady decrease from a high of $14.73 per $1,000 in fiscal 1999 to a low of $9.74 per $1,000 in fiscal 2007. Since then, the average rate has increased every year to its current level of $15.19 per $1,000.

“This reflects a year-to-year trend in property values over the time period,” the DLS report states. “When values went up, tax rates usually decreased and visa-versa.”

For fiscal 2014, average statewide assessed values for single-family homes increased from the prior year for the first time since fiscal 2008. The average home value reached a high point in fiscal 2007 at $406,673. Values then dropped by a total of almost 13 percent over the next six years to $354,292 in fiscal 2013. Unlike many other states, Massachusetts experienced only modest value swings compared to other parts of the country.

“Looking ahead, it appears that values are starting to trend upward as the economy recovers,” the report states. “Average property tax bills are also likely to continue to move upward to accommodate an increase in the cost of services. Due to Proposition 2½, these increases would likely be no more than 3 to 4 percent resulting from less new growth and a limited call for overrides within many communities. This will keep levy limits from growing little more than the statutory 2.5 percent and could constrain levy increases in the coming years.”

The DLS analysis excludes 24 communities. Thirteen cities and towns that have adopted a residential exemption – Barnstable, Boston, Brookline, Cambridge, Chelsea, Everett, Malden, Nantucket, Somerset, Somerville, Tisbury, Waltham and Watertown – were excluded because sufficiently detailed data used to determine their average tax bills is unavailable. Additionally, 11 communities – Athol, Chester, Conway, Egremont, Gosnold, Monroe, Orange, Oxford, Royalston, Russell and Templeton – had not set fiscal 2014 tax rates when the report was written.

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