Basics

• Municipal assessors value real estate based on market value as of Jan. 1, and cities and towns set their annual tax rates based on assessed values and spending levels. The law allows a community to decide whether to split the rates between different classes of property, taxing commercial and industrial property at a higher rate. The state checks assessors' work and certifies local values and tax rates. In Massachusetts, counties have no role in assessing property or collecting property taxes; each city and town handles assessing and tax collection. Massachusetts sets tax rates per $1,000 of assessed value.
  
  

Numbers

• A lower tax rate doesn't necessarily mean lower taxes; you have to look at values and tax rates for each town to compare average tax bills. Statewide, the average tax bill on a single-family house was $4,390 for the fiscal year that began July 1, 2009, and ended June 30, 2010. The town of Weston had the highest average tax bill at $15,542; Hancock had the lowest at $824. Nationwide, the Tax Foundation placed Massachusetts in the top 10 states for median real-estate tax bills for 2009; New Jersey, Connecticut and New Hampshire led the list.
  
  

Appeals

• A taxpayer can appeal his annual property assessment to local assessors. If he's not satisfied with the local decision, he can appeal to the state's Appellate Tax Board. Beyond that, a taxpayer can take an appeal to court to challenge the value.
  
  

Limits

• Massachusetts voters approved Proposition 2 1/2 in 1980; it took effect in 1982. This proposition doesn't limit increases in individual tax bills, but it does restrict increases in a city or town's total tax levy each year. The tax levy is the amount the community raises through property taxes. Local voters can approve an override to authorize an additional increase in the tax levy or exempt debt for a specific project, such as a new school, from Proposition 2 1/2 limits. Although rare, the law also allows local voters to approve an underride to reduce the community's tax capacity. Proposition 2 1/2 questions go to voters at special local elections called for that purpose or on the ballot for a regular election.
  
  

Exemptions and Tax Breaks

• Massachusetts law allows for property tax exemptions and breaks. They include exemptions for certain property owned by nonprofit organizations, including churches, museums and educational institutions; tax breaks for farm, forestry and recreational land; and deferrals for senior citizens. The exemption for nonprofits means that they don't pay property taxes to cities and towns for much of their property, although certain nonprofits may agree to make payments in lieu of taxes to help pay for local services.