Acting on a proposal by the City Council and a stipulation in last summer’s state Municipal Modernization Act, Mayor Martin Walsh announced this week a proposal to increase Boston’s residential property tax exemption for the first time since 2000.
The proposal would reduce average property tax bills for single family, owner-occupied residences by $299. If adopted, the proposal would increase the residential tax exemption for taxpayers who occupy their homes as their principal residences to 35 percent in an effort to provide substantial tax relief to homeowners in Boston. The average property tax bill for these taxpayers would decrease from $3,533 to $3,234.
“The City of Boston has been rapidly growing and expanding over the past few years and it’s paying off,” said Mayor Walsh. “Whether they’ve lived here for decades or just moved in, our residents are the foundation to this vibrant and thriving city. We’re happy to let Boston homeowners keep a little more money in their pockets come tax season with this increase in the residential exemption.”
This proposal was filed by City Councilor Mark Ciommo after the state last week passed a law, led by Joint Committee on Revenue Chairmen Jay R. Kaufman and Michael J. Rodrigues and advocated for by Mayor Walsh, that increased the maximum residential exemption in Boston. If passed by the City Council, the residential tax exemption will exceed $2,000 for the first time, representing an increase of $472 over last year’s amount. Each qualifying homeowner will save $2,435 on their property tax bill by qualifying for the exemption.
The residential exemption is an important tool that provides support to the middle class in the City. Increasing the residential exemption will keep Boston’s taxes competitive with other communities, as the average residential tax bill in Boston will fall 38 percent below last year’s statewide average of $5,247.
A historically strong business and real estate climate in Boston has resulted in record new tax revenue growth, producing $75.5 million in growth to the tax base due to new construction and properties being added to the tax base, the highest amount ever produced by the City in new growth.
Homeowners would see the proposed rates reflected in their third quarter tax bills that will be sent out at the end of the year.