Proposition 2½ Caps the City's Total Levy

The 2.5% in Proposition 2½ applies to the total a city or town raises in property taxes. Boston’s assessing page says the law doesn’t limit the year to year growth in individual tax assessments.

Two limits, both on the total

Massachusetts voters passed Proposition 2½ in 1980. Boston’s assessing page describes the law in two lines. First, the levy ceiling: the amount raised in property taxes can never be more than 2.5% of the full cash value of all taxable property in the city or town. Second, the levy limit: the amount raised can’t jump more than 2.5% from year to year, with exceptions for new growth and for overrides and exclusions that voters approve. The same page then says that Proposition 2½ does not limit the year to year growth in individual tax assessments.

How the statute writes it

The law is M.G.L. c. 59, § 21C. Paragraph (b) holds total taxes assessed to two and one-half per cent of the full and fair cash valuation in any fiscal year. Paragraph (f) sets each year’s total at no more than 102.5% of the prior fiscal year’s maximum levy limit, as determined by the Commissioner of Revenue, and then allows two additions: amounts voters approve under paragraph (g), and new growth, which the paragraph describes as the prior year’s tax rate applied to the increase in value of property taxed for the first time, taxed as a separate parcel for the first time, or assessed higher than the year before for a reason other than a revaluation of the entire city or town. Total taxes assessed, in the section’s own definition, is the net amount raised by the property tax on all real estate and personal property in the city or town.

Where your bill comes from

Your bill is your assessed value times the tax rate. The city sets the rate each fiscal year and prints it on the third quarter bill, which typically goes out in late December. The first two quarterly bills are estimates built on the prior year’s value and rate. Boston’s fiscal 2026 rates were $12.40 per thousand dollars of value for residential property and $26.96 for commercial, industrial and personal property. Those are the rates the fiscal 2027 first and second quarter bills are estimated on, and the fiscal 2027 rate appears on the third quarter bill. The levy limit applies to the total those rates raise, and the assessing page says the law doesn’t limit how much an individual assessment changes from one year to the next.

Overrides and exclusions

Under paragraph (g), the local appropriating authority can vote to put an override question on the ballot for a specified dollar amount, and the question passes with a majority of the people voting on it. The statute carries separate questions for capital outlay and for debt. New growth needs no vote at all.

Reading the third quarter bill

When the third quarter bill arrives with the new value and rate, read the value first. If it doesn’t fit what you know about your house and your street, the city’s abatement process is the route, and the assessing page links to it. If you own in Boston and want a second pair of eyes on the value line, send it over. Diana Kim, REALTOR®, eXp Realty.