The property tax law defends Massachusetts homeowners.

This Op-Ed Appeared in the Monday, May 25 edition of the Boston Globe.

https://www.bostonglobe.com/2026/05/25/opinion/proposition-2-12-property-tax-law-massachusetts/

By Paul Diego Craney and Jared Walczak

At a time when the cost of living in Massachusetts continues to rise, property taxes remain one of the most significant burdens facing homeowners. Thanks in large part to Proposition 2 1/2, they are also far more predictable than they once were. A new study from the Fiscal Alliance Foundation takes a closer look at this landmark law and finds that it continues to play a vital role in moderating that burden.

Proposition 2 1/2 imposes a levy limit, under which the local property tax levy cannot increase by more than 2.5 percent over the prior year’s, excluding tax revenue added to the base by new construction. Any increase beyond this limit requires voter approval.

Before Proposition 2 1/2 was adopted in 1980, property tax burdens in Massachusetts were among the highest in the nation, exceeding the national average by nearly 300 percent. Today, the average effective property tax rate has fallen from 3.72 percent to approximately 1.04 percent. For the median homeowner, that translates into an annual tax bill of about $6,900. Without Proposition 2 1/2, that figure would exceed $24,000.

These differences are not abstract. Homeowners pay roughly 19 percent less in property taxes than they would have if the law had not been in place for the past decade. Over two decades, the savings have risen to 22 percent. For a typical household, that can amount to thousands of dollars in savings. Put another way, it would mean the equivalent of working an additional five days each year to pay property taxes rather than keeping that income.

Without Proposition 2 1/2, Massachusetts homeowners would have paid an additional $1,176 in real terms per $100,000 in current home values over the past decade. That represents $7,780 in savings over a decade on the median single-family home value of $661,590.

Additionally, the study lists all the cities and towns, including many large communities, that have never adopted a Proposition 2 1/2 override, underscoring the law’s durability and continued voter support. In all, 97 municipalities, or more than 25 percent, have never adopted a Proposition 2 1/2 override in the 46 years that the law has existed.

Critics argue that Proposition 2 1/2 is overly restrictive and prevents local governments from raising sufficient revenue. But our study finds that this view greatly oversimplifies how the law works. Proposition 2 1/2 does not freeze property tax collections. In fact, tax revenue has grown by an average of 4.4 percent annually over the past two decades, driven in large part by new construction and other factors intentionally built into the law.

What Proposition 2 1/2 does do is limit the extent to which rising property values automatically translate into higher tax bills. In today’s real estate market, that distinction matters. Without it, homeowners could face sudden and substantial increases in their tax liability, even if local officials never vote to raise taxes. By constraining those automatic increases, the law introduces a measure of predictability and accountability into the system.

The study also points to another, often overlooked factor in the fiscal pressures facing municipalities: state aid. Massachusetts provides less local aid, on average, than other states. If funding levels were in line with the national average, cities and towns would have access to billions more in revenue, reducing reliance on property taxes without altering Proposition 2 1/2.

Specifically, if local aid levels matched national norms, cities and towns would receive an additional $1.82 billion more in revenue, an amount roughly equivalent to a 9 percent increase in property tax collections. If Massachusetts matched the per capita national average, the Commonwealth’s municipal governments would have received an additional $3.14 billion in 2023, revenue equal to 15 percent higher property taxes.

After more than four decades, the law has proven to be a durable framework that balances the needs of local governments with the capacity of taxpayers. Last year, Boston Mayor Michelle Wu called for its repeal, and more recently, the Massachusetts Municipal Association sought public support for its weakening, through adopting higher or adjustable levy caps, or allowing voters to pass multiyear levy limit overrides.

Proposition 2 1/2 has other provisions, which would also be undone if it is repealed. The measure reduced the annual vehicle excise tax by 62 percent, prohibited unfunded state mandates on localities, created a renters’ income tax deduction, and eliminated school districts’ ability to raise taxes on their own.

Rather than weakening Proposition 2 1/2, lawmakers should focus on increasing local aid. The balance Proposition 2 1/2 provides is worth preserving and protecting.