Massachusetts Real Estate Tax Burden: Among Top Five Nationwide

by Billy Abildgaard

The analysis, based on real estate tax rates, positioned Massachusetts at No. 34 overall but within the top 10 states where homeowners pay the most.

In this article, we delve into the key findings of the report, shedding light on the annual tax figures and exploring how Massachusetts compares to neighboring states. Additionally, we'll discuss the implications of these tax rates against the backdrop of the recent surge in median home prices.

Understanding the Numbers

Homeowners in Massachusetts face an annual tax bill of $5,584 on properties valued at the state's median home value of $483,900. The report, which calculated rankings by dividing each state's median real estate tax payment by the median home price, placed Massachusetts behind only New Jersey, Connecticut, New Hampshire, and New York in terms of annual tax burdens.

Comparisons with Neighboring States

While Massachusetts ranks at No. 34, the states surrounding it generally fared worse due to their high tax rates. Maine, Rhode Island, New York, Vermont, New Hampshire, and Connecticut were listed lower on WalletHub's ranking, with Massachusetts having higher median home values. The report emphasizes that Massachusetts not only contends with moderately high tax rates but also grapples with significantly high home values, impacting the overall real estate tax burden on its residents.

Impact on Housing Market Trends

The data becomes particularly relevant when considering the broader context of the real estate market. In January, median single-family home prices in Massachusetts surged by 10.2%, reaching $550,000 compared to January 2023.

Similarly, the median condominium price increased from $480,500 to $507,000 in the same period. The analyst from WalletHub, Cassandra Happe, points out that the state's high home values play a significant role in shaping the impact of moderately high tax rates.

Navigating the Real Estate Landscape

Prospective homebuyers are advised to research property tax rates in their target towns and cities, seeking insights from realtors and homeowners to gain a nuanced understanding beyond numerical figures. As the real estate tax landscape continues to influence housing decisions, this report serves as a valuable resource for those looking to make informed choices in the Massachusetts real estate market.