Boston Mayor Michelle Wu is seeking approval from state lawmakers to increase the allowable split between commercial and residential property taxes beyond the current 175% cap. The proposal would allow Boston to set a split rate of up to 200%, shifting more tax liability onto commercial properties. This legislative change requires authorization from the Massachusetts legislature.
For the second consecutive year, this proposal has stalled in the state legislature. The National Federation of Independent Business (NFIB) remains opposed to increasing the split rate, arguing that it could set a precedent for other municipalities facing budget shortfalls to seek similar legislative approval.
In 2024, there was an attempt at compromise with a proposed split rate of 181.5%, which would have decreased over five years. However, this compromise was not finalized. NFIB commented against even this measure, stating: “the shift would still harm small businesses in Boston further burdening them with higher property taxes.”
The organization also expressed concern that these tax split bills are ways for municipalities to bypass Massachusetts’ Proposition 2½ law, which limits property tax increases.
“It appears that an impasse between the House and Senate will prevent any further action on the 2025 tax split bill, but it is one we will continue to monitor,” NFIB stated.
