The Tax Rate Reality Check: How Property Taxes Change Your Total Cost
A data-driven analysis of how property tax rates impact total ownership cost: which towns have the highest (and lowest) tax burdens, and how $2,000-$5,000 annual differences add up over 30 years
Lexington: $12.98/$1,000 tax rate, $1.45M median = $18,821/year. Reading: $13.50/$1,000 tax rate, $845K median = $11,408/year. The $7,413 annual difference seems small—but over 30 years, that's $222,390. This analysis reveals how property tax rates impact total ownership cost across Greater Boston, which towns have the highest (and lowest) tax burdens, and how to calculate true total cost.
The Tax Rate Reality: It Adds Up
- Tax rate ranges: $8.11-$19.50 per $1,000 assessed value
- Annual impact: $2,000-$5,000 difference between high and low tax towns
- 30-year total: $60,000-$150,000 difference over mortgage lifetime
- Total cost calculation: How to factor taxes into true ownership cost
Data Sources:
- Massachusetts Department of Revenue (official tax rates)
- Town assessor data (FY2025 rates)
- 9,550+ transactions from Apify
See our Methodology Page for complete data transparency.
📊Tax Rate Ranges: Highest and Lowest
| Town | Tax Rate | Annual Tax ($1M home) | 30-Year Total | Category |
|---|---|---|---|---|
Boston | $19.50 | $19,500 | $585,000 | Urban |
Cambridge | $18.50 | $18,500 | $555,000 | Urban |
Somerville | $17.50 | $17,500 | $525,000 | Urban |
Lexington | $12.98 | $12,980 | $389,400 | Suburban |
Reading | $13.50 | $13,500 | $405,000 | Suburban |
Dover | $8.11 | $8,110 | $243,300 | Exurban |
Sherborn | $8.50 | $8,500 | $255,000 | Exurban |
Weston | $9.20 | $9,200 | $276,000 | Exurban |
Key Insights:
- Highest tax rates: Urban towns (Boston $19.50, Cambridge $18.50, Somerville $17.50)
- Moderate tax rates: Suburban towns (Lexington $12.98, Reading $13.50)
- Lowest tax rates: Exurban towns (Dover $8.11, Sherborn $8.50, Weston $9.20)
- 30-year impact: $243K-$585K difference (significant)
The Pattern: Urban towns have highest tax rates (more services, infrastructure). Exurban towns have lowest tax rates (fewer services, larger lots). Suburban towns fall in between.
The Insight: A $5,000 annual tax difference = $150,000 over 30 years. Factor this into total cost calculations.
💰Total Cost Analysis: How Taxes Impact Affordability
Here's how tax rates impact total monthly cost on a $1M home:
| Town | Tax Rate | Annual Tax | Monthly Tax | Monthly PITI (6.75%) | Total 30-Year |
|---|---|---|---|---|---|
Boston | $19.50 | $19,500 | $1,625 | $8,492 | $3.06M |
Cambridge | $18.50 | $18,500 | $1,542 | $8,409 | $3.03M |
Lexington | $12.98 | $12,980 | $1,082 | $6,949 | $2.50M |
Reading | $13.50 | $13,500 | $1,125 | $6,992 | $2.52M |
Dover | $8.11 | $8,110 | $676 | $6,543 | $2.36M |
- Total Cost Analysis (Assumptions):
- Home price: $1,000,000
- Down payment: 20% ($200,000)
- Loan amount: $800,000
- Interest rate: 6.75% (30-year fixed)
- Monthly principal + interest: $5,184
- Insurance: $200/month ($2,400/year)
- Taxes: Varies by town (see table)
- Key Insights:
- Boston: $8,492/month PITI = $3.06M total over 30 years
- Dover: $6,543/month PITI = $2.36M total over 30 years
- Difference: $1,949/month = $701,640 over 30 years
The Insight: Tax rates can add $700K+ to total ownership cost over 30 years. Factor this into affordability calculations.
📈Tax Burden by Price Tier
How tax burden scales with home price:
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| Home Price | Low Tax ($8.11) | Mid Tax ($13.50) | High Tax ($19.50) | 30-Year Difference |
|---|---|---|---|---|
$500K | $4,055 | $6,750 | $9,750 | $170,850 |
$1M | $8,110 | $13,500 | $19,500 | $341,700 |
$1.5M | $12,165 | $20,250 | $29,250 | $512,550 |
$2M | $16,220 | $27,000 | $39,000 | $683,400 |
Tax Burden Scaling:
- $500K home: $4,055-$9,750 annually ($170,850 difference over 30 years)
- $1M home: $8,110-$19,500 annually ($341,700 difference over 30 years)
- $1.5M home: $12,165-$29,250 annually ($512,550 difference over 30 years)
- $2M home: $16,220-$39,000 annually ($683,400 difference over 30 years)
The Insight: Tax burden scales linearly with home price. On a $2M home, the difference between low and high tax towns is $683,400 over 30 years—more than many people's retirement savings.
🎯Strategic Recommendations: Factor Taxes Into Decisions
The Tax Rate Calculation
Formula: Annual Tax = (Assessed Value ÷ 1,000) × Tax Rate
Example:
- Home assessed at $1,000,000
- Tax rate: $13.50 per $1,000
- Annual tax: ($1,000,000 ÷ 1,000) × $13.50 = $13,500
- Monthly tax: $13,500 ÷ 12 = $1,125
Note: Assessed value is typically 90-100% of purchase price in Massachusetts (varies by town).
Action: Check Tax Rates Page for your finalist towns' tax rates before deciding.
The Hidden Cost Trap
Reality:
- $2,000 annual tax difference = $60,000 over 30 years
- $5,000 annual tax difference = $150,000 over 30 years
- $10,000 annual tax difference = $300,000 over 30 years
Strategy: Factor tax burden into total cost calculations. A $1.2M home with low taxes may cost less over 30 years than a $1.1M home with high taxes.
Action: Use Town Comparison Tool to compare total 30-year costs, not just purchase prices.
🛠️Tools to Calculate Tax Impact
- •Tax Rates Page - Complete tax rate data for all Greater Boston towns
- •Town Comparison Tool - Compare tax rates and total costs side-by-side
- •Town Finder - Factor tax burden into your search (consider total cost, not just price)
- •Browse All Towns - Check individual town tax rates and total cost calculations
📚Related Analysis
- •Commute Cost Calculator - Calculate true commute costs
- •Value vs. Schools Trade-Off - When value markets beat prestige
- •Methodology - How we calculate total ownership costs
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