Boston.gov
How does the government calculate your tax rate?
Most revenue to cover spending comes from property taxes, but other sources include program revenues, grants, and fines.
Massachusetts has a split tax system, allowing the City to collect the property tax levy from commercial and residential properties at different rates. The City determines how much of the tax levy each group will pay by first calculating a 'natural tax rate'. This is done by dividing the total tax levy over the value of commercial real estate plus the value of residential real estate.
Next, the City determines how much of the property tax levy each group will pay.
The Massachusetts State law allows for commercial property owners to be taxed up to 175% of the natural tax rate, thereby reducing the burden on residential property owners. As of FY25, commercial property owners pay 175% of the natural tax rate.
Use the interactive slider to change the percentage to see how it impacts the tax obligation for each group:
Finally, the tax rates for each group are calculated by spreading the tax obligation evenly across their respective total property values. This shows how much tax is paid per $1,000 of property value.