Taxpayers who are informed of an increase in the value of their property are understandably concerned that their tax bills will increase correspondingly. In the past – before cities and towns in Massachusetts were regularly revaluing their properties to the market value and before Proposition 2 ½ limited the amount a community can collect from the property tax - there were often dramatic increases in tax bills when property as reassessed.
For the most part, however, this is no longer true. In fact, as valuations go up, tax rates go down and thus taxpayers will be paying a lower rate per thousand dollars of valuation. Any increase in the bill should be moderate, reflecting the minimal increase in overall property taxation allowed by proposition 2 ½ (and any override approved by the voters).
Nevertheless, there are certain instances when the increase in value may bring more than a minimal increase in tax-payer's bill.
When the increase in value is the result of an addition to the property (a swimming pool or a new room) or when the value of a particular class of property is rising more rapidly than other classes in the same community (beach-front homes, for example), the taxpayer can expect his or her bill to reflect those circumstances.
Taxpayers in communities that approve an override of Proposition 2 ½ will also expect to see that additional tax reflected in their bills. Otherwise, there should be no dramatic increase as the result of a revised valuation figure.
It can be helpful to think of the property tax collection as the total a community can collect from each taxpayer each year in proportion to the value of the property. Both that total amount and any annual increase are limited by Proposition 2 ½.