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Home Ownership

Property taxes in Cambridge & Somerville: beyond the numbers

02/26/20  |  Ellie Botshon

Ellie lives in Somerville, and Liz in Cambridge. Both cities are getting a decrease in property tax levels, but what does that really mean? Will people in these cities be paying lower tax bills in 2020?

Ellie lives in Somerville and Liz in Cambridge, so it’s a cinch for them to stay current on these two markets. Furthermore, they also know how the local departments and services work in their neighborhoods: They notice when there’s been a change in the recycling schedule, or when a new dog park opens up, and last but not least, they know when their property taxes change. And this year, their rates are going down. That’s certainly something to celebrate, but will it deplete their cities’ coffers? No way! Read on to understand what’s at play here.
 
Okay, tax rates are going down in Cambridge and Somerville. By how much?
 
In Somerville, last year’s residential tax rate was $10.6 per thousand dollars of home value. 2020’s rate is $10.09, a decrease of about 6%.
 
In Cambridge, last year’s residential tax rate was $5.94 per thousand dollars of home value.
2020’s rate is $5.75, a decrease of about 2%.
 
In both cities, the commercial tax rate also fell, by 5% in Somerville and by 7% in Cambridge.
 
Why did these tax rates fall, and does that mean those bills will be smaller this year?
 
It has nothing to do with the 2018 change in federal tax codes). Instead, both cities continue to have strong growth, either by renovations of old homes or construction of new properties, both residential and commercial. Somerville in particular benefited from the $96 million at Cambridge Crossing and nearly $34 million Assembly Row development (and if you haven’t been out to Assembly Row and/or Bow Street Market in Union Sq yet, take an afternoon or two to explore them. They’re not your average ho-hum plazas!). These businesses pay taxes, which in turn reduce the homeowner’s portion of the tax burden.
 
The second contributing factor is that the overall value of properties is increasing, as it has done for the past decade. Because taxes are based on a home’s value, when your home’s value goes up your tax bill also goes up. Somerville and Cambridge residences and commercial properties have such incredible value now that their tax bills would skyrocket without these commercial offsets. In reality, these tax bills will only go down a smidgeon this year, or will increase by a small amount (generally under $250 for a single family home).
 
But wait, there’s more! There are residential exemptions in Cambridge and Somerville.
 
The residential tax exemption in Somerville is the highest in all of Massachusetts, at 35%, up to a home's value of $326,900. Cambridge offers a 30% residential tax exemption. These tax breaks can save you somewhere between $2,500 and $3,500 in taxes annually.
 
Scroll down to see the 2020 tax rates and residential exemptions for cities in the Greater Boston area.
 
What’s the takeaway?
Property prices in Somerville and Cambridge are high and still rising, but tax rates are holding steady, so home and business owners don’t need to freak out, cash out, and take themselves elsewhere. If you live in these cities, you won’t see a big change in your yearly property taxes; and if you’re looking to move to either city, don’t let the low rate fool you into thinking your tax bill will be tiny. Instead, look at the combination of home prices and property taxes to get a fuller sense of your yearly bill.
 
Do you have questions, or are you looking to move soon? Contact us. We’re here to help.
 

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