Boston does not impose a city income tax or a local sales tax on general merchandise. The city raises most of its money through the property tax, with the Fiscal Year 2026 residential rate set at $12.40 per $1,000 of assessed value and the commercial, industrial, and personal property rate set at $26.96 per $1,000.1City of Boston. Residential and Commercial Tax Rates History On top of that, Boston charges local excise taxes on hotel stays, restaurant meals, registered vehicles, and cannabis sales. Here is what each of those rates looks like in practice and what you can do to lower the ones that apply to you.
Property Tax Rates for FY2026
Massachusetts lets cities tax commercial property at a higher rate than residential property, and Boston uses the maximum shift the law allows every year. That is why the commercial figure is more than double the residential one.
- Residential (Class 1): $12.40 per $1,000 of assessed value
- Commercial, Industrial, and Personal Property: $26.96 per $1,000 of assessed value
Boston’s fiscal year runs from July 1 through June 30, and property is valued as of January 1 preceding that fiscal year. The FY2026 bills reflect values as of January 1, 2025.2City of Boston Assessing Department. FY 2026 Assessing Calendar A renovation finished after that date won’t show up on your bill until the following year.
Two statewide caps, known together as Proposition 2½, keep the total tax levy in check. The levy cannot exceed 2.5% of the city’s total assessed value, and it cannot grow more than 2.5% over the prior year’s limit (plus revenue from new construction). When assessed values climb across the city, the per-$1,000 rate has to come down to stay within those caps. Your individual bill can still go up if your property appreciated faster than the citywide average, but the overall pool of tax dollars Boston collects does not jump with the market.
The Residential Exemption for Owner-Occupants
If you own and live in your Boston home as your primary residence on January 1 of the assessment year, you can claim the Residential Exemption. For FY2026 it removes roughly $351,108 from your taxable value, worth up to $4,353.74 off the bill.3City of Boston. Residential Exemption A home assessed at $800,000 would be taxed on about $448,892 instead of the full value.
The exemption is not automatic. You apply through the Assessing Department, and the city checks residency against voter and vehicle registration records. Rental properties where the owner does not live on-site do not qualify, and because the exemption lowers the taxable base for owner-occupants without changing the total levy, non-owner-occupied residential properties effectively absorb a bit more of the burden per dollar of value.
Exemptions and Deferrals for Seniors, Veterans, and Others
Boston offers several statutory exemptions beyond the residential one. The Elderly Exemption under Clause 41C can take up to $1,000 off the bill of a qualifying homeowner 65 or older, with the city authorized to add another $1,000 on top. For FY2026, income is capped at $25,980 for a single filer and $38,970 for a married couple (including Social Security), and non-home assets cannot exceed $40,000 for a single person or $55,000 for a married couple. The extra $1,000 is withheld if it would drop your FY2026 bill below your FY2025 bill or push taxable value below 10% of the assessed amount.4City of Boston. Elderly Exemption 41C
Separate exemptions exist for blind persons, surviving spouses, and disabled veterans, each with its own eligibility rules. The application deadline is April 1, or three months after the third-quarter actual tax bill is mailed if that date is later.2City of Boston Assessing Department. FY 2026 Assessing Calendar
Seniors who cannot afford the full bill but want to stay in their home can also use the Clause 41A deferral. If you are 65 or older and meet the income threshold, you can defer all or part of the tax. The deferred amount accrues interest at 4% a year and comes due when the property is sold, transferred, or when the owner dies.5City of Boston. Tax Deferral 41A It functions as a low-interest lien on the home.
Hotel and Short-Term Rental Taxes
Hotels and motels in Boston are taxed at a combined 14.95% on room charges: a 5.7% state excise, a 6.5% local option (the highest rate Massachusetts allows and available only to Boston), and a 2.75% convention center financing surcharge.6Mass.gov. Room Occupancy Excise Tax
Short-term rentals, meaning residential stays of 31 days or less, pay all three of those taxes plus an additional 3% community impact fee Boston adopted in 2019.7Massachusetts Department of Revenue. Room Tax and Impact Fee Effective Dates and Rates That brings the total to 17.95% on a short-term rental booking.
Meals Tax
Restaurant meals in Boston are taxed at 7%, combining the 6.25% state sales tax on meals with Boston’s 0.75% local option meals excise, which is the maximum the state allows.8Mass.gov. Sales Tax on Meals It covers dine-in and takeout from restaurants but not groceries.
Motor Vehicle Excise
Anyone who registers a vehicle in Massachusetts owes an annual motor vehicle excise to the city or town where the vehicle is principally kept. The statewide rate is $25 per $1,000 of taxable value.9Mass.gov. Motor Vehicle Excise Taxable value is not the sale price or the resale value. It is a set percentage of the manufacturer’s list price, and that percentage drops each year:
- Year of manufacture: 90%
- Second year: 60%
- Third year: 40%
- Fourth year: 25%
- Fifth year and after: 10%
A vehicle with a $40,000 list price is taxed on $36,000 in its first year, producing a $900 bill. By year five, it is taxed on $4,000, producing a $100 bill. Registering partway through the year prorates the excise by month.10Secretary of the Commonwealth of Massachusetts. Motor Vehicle Excise Information
Cannabis Excise
Retail cannabis is taxed at a combined 20% in Boston: the 6.25% state sales tax, a 10.75% state marijuana excise, and the city’s 3% local option.11Mass.gov. Massachusetts Tax Rates
Payment Schedule and Late Penalties
Property tax bills come quarterly. The first two are preliminary estimates based on last year’s tax; the second two reflect the current year’s actual rate and valuation.
- First quarter (preliminary): due August 1
- Second quarter (preliminary): due November 1
- Third quarter (actual): due February 1
- Fourth quarter (actual): due May 1
Any gap between what you paid in the preliminary quarters and what you actually owe gets spread across the third and fourth quarters.2City of Boston Assessing Department. FY 2026 Assessing Calendar Payments count as received on the date the Collector-Treasurer actually gets them, not the postmark. If your mortgage servicer pays through escrow, the bill goes to the lender, but you remain responsible if the lender misses it.
Miss a due date and the clock starts immediately. After 30 days the Collector-Treasurer sends a demand notice with a $5 demand fee, and interest runs from the day after the due date at 14% per year.12City of Boston. Problems With Real Estate Tax Bills That rate is set by state law and is not negotiable. Continued nonpayment leads to a tax lien on the property, which clouds title and blocks a sale or refinance, and eventually to a tax taking. Municipal property tax liens take priority over most other claims, including federal tax liens.