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Tax Rate

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How the Tax Rate Is Set

A municipality's tax rate is the amount charged per $1,000 of assessed value of taxable real and personal property. The rate is established each fiscal year based on the amount that must be raised through property taxes and the total assessed value of taxable property.

How the Rate Is Determined

Each year, the Town prepares a Tax Rate Recapitulation Sheet (Tax Recap) for submission to the Massachusetts Department of Revenue's Division of Local Services. The Tax Recap summarizes the Town's financial plan for the fiscal year, including anticipated expenditures and available revenues.

Revenue from sources such as state aid, local non-tax revenues, and reserves is applied toward the Town's expenditures. The remaining amount that must be raised through property taxes is the tax levy.

Property Tax Rate
Tax Levy ÷ Total Taxable Value × 1,000

Before the Tax Rate Can Be Set

Three important steps must be completed before the Town's tax rate can be established:

1
Determine the maximum amount the Town may levy under Proposition 2½.
2
Establish final assessed values for all taxable real and personal property.
3
Determine how the property tax levy will be distributed through the annual tax classification process.

Tax Rate Approval

The Massachusetts Department of Revenue reviews and approves the Town's tax rate. This review ensures that the Town has a balanced budget and that the property tax levy complies with the limits established by Proposition 2½.

Key Terms

Tax Levy
The total amount of property tax revenue the Town raises for the fiscal year.
Assessed Value
The value assigned to taxable real and personal property for property tax purposes.
Tax Rate
The property tax rate charged per $1,000 of assessed value.

Related Information

Learn more about Proposition 2½, which establishes limits on the Town's property tax levy, and Tax Classification, which determines how the levy is distributed among property classes.