Newton City Council Sets 2022 Property Tax Rates

NEWTON, MA — The Newton City Council set the 2022 property tax rates at Wednesday's meeting, voting to slightly decrease both the residential and commercial rates.

Because property values in Newton are on the rise, with the value of single family homes increasing by about 7 percent and the value of commercial properties increasing by approximately 2 percent for a total of 6.5 percent, Councilors were able to decrease the tax rates without compromising city programs.

Councilors set the 2022 residential tax rate at $10.52 and the commercial tax rate at $19.95 per $1,000 in assessed property value, compared to last year's residential rate of $10.76 and commercial rate of $20.12.

Although tax rates will decrease next year, property taxes will increase. This is because the increase in property values in Newton mentioned above will impact the amount an individual property owner is required to pay.

The city is only allowed to increase the amount of money it raises through property taxes by 2.5 percent each year. Because the total assessed valuation for the city increased by 6.5 percent, the tax rate will go down even as tax bills go up, as shown in this equation:

Total Revenue Required from Taxes/Total Assessed Valuation = Tax Rate

Splitting the tax rate

Newton splits its tax rate in order to take some responsibility away from residential property owners and place a bigger burden on commercial property owners.

Residential property values make up 90.5 percent of the assessed taxable value of all properties in the city and commercial commercial property values make up the other 9.5 percent.

The maximum allowable residential factor for Newton is 175 percent, or 1.75 times the taxable value of all commercial properties. If a factor of 175% is adopted, the commercial class becomes responsible for 16.7% of the tax levy.

Ahead of the 2022 property tax decision, Mayor Ruthanne Fuller recommended that Newton return to the 175 percent shift. The City Council agreed to this recommendation and voted in favor of the shift, which means owners of commercial, industrial, and business personal property will be responsible for 16.7 percent of taxes and residential property owners will be responsible for the other 83.3 percent.