Marblehead’s 2025 Property Tax Explained

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Marblehead’s property tax rate for Fiscal Year 2025 (July 1, 2024- June 30, 2025) has been set at $9.05, slightly up from $8.96 in FY 2024.

The formula for calculating the property tax is: take the $ amount of the previous year’s Tax Levy, add 2.5% for Proposition 2 1/2, and also add any New Growth (such as new construction or a condo conversion). This figure is the new tax levy. To this figure is added debt service – the Principal and Interest payable on the town’s debt – to produce the total Tax Levy.

The tax rate is then calculated by dividing the Tax Levy by the Assessed Value of property – and, crucially, that calculation is based upon prices as of January 1, 2024, using date from sales in calendar year 2023.  What that means is that 2024 sales are used for the calculation of the tax rate in FY2026 – not FY2025.

Here are the numbers for Fiscal Years 2024 and 2025, remembering that FY 2025 runs from July 2024 to June 2025:

The Tax Levy calculation
The dollar amount raised by the property tax will increase year by year. That is because of the formula: last year’s number plus 2.5% plus new growth. In the table above you can see how the FY 2024 tax levy of $71,416,980 becomes the base for FY 2025. Add $1,785,425 for Prop 2.5% and $324,437 for new growth and the new figure is $73,526,842. To this number is added the debt service of $10,913,654 – to give a total amount to be raised of $84,440,496.

The Tax Rate

The actual tax rate depends upon the total Assessed Value of all property: residential, commercial and personal. The tax rate is calculated by dividing the total dollar amount to be raised by the total Assessed Value of all property. Thus, while the $ amount raised by the tax (and therefore the median tax bill) will increase each year, the headline tax rate will fluctuate depending upon the direction of Assessed Values.

In simplistic terms, the $ amount raised,before debt service, will increase by a little more than 2  1/2% each year, so if the median Assessed Value also increases by a little more than 2  1/2% the tax rate will be unchanged. If the increase in Assessed Values is less than 2  1/2%, then the tax rate will rise. And if the increase in Assessed Values is more than 2  1/2% then the tax rate will fall. For FY2025 the overall increase is 1.68%, so the nominal tax rate will rise slightly.

In FY 2024 the tax rate was $8.96, achieved by dividing the $82.2 million to be raised by the $9.17 billion of Assessed Value. And in FY 2025 the calculation is $84.4 million divided by $9.32 billion, which produces a rate of $9.05. The average tax bill for Single Family Homes, based on the higher Assessed Values, will increase by $241 or 2.2%, to $11,020.

Commercial Property
The calculation of the tax rate is made simpler by the fact that Marblehead’s Select Board votes each year to have a single tax rate for both residential and commercial property. In towns which elect to have a differential rate – i.e. by taxing commercial property at a higher rate than residential – there are generally two different tax rates, achieved by dividing the amount to be raised from residential and commercial taxpayers by their respective aggregate Assessed Values.
Because over 95% of Marblehead’s valuation comes from Residential property, implementiing a differential rate would have a dramatic impact. For example, a 50% loading for commerical property would drive that rate to $13.58, while dropping the residential rate to only $8.84.

How does debt service affect the tax rate?
The property tax rate announced each year also includes the cost of debt service:

How can I appeal my FY2025 assessment?
Click Dispute Property Assessment Value/Tax Bill to understand the process for appealing your assessment. Note that appeals must be based upon values as of January 1, 2024 (i.e. sales in 2023), and must be received by the Board of Assessors no later than February 1.

How does debt service affect the tax rate?In 2024, the year that is the basis for the FY 2026 property tax calculation, the median MLS SFH sale price increased 14% to $1,100,000. This suggests that the actual tax rate should decline for FY2026, but we will get a clearer idea after the town publishes its budget.

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If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, please contact me on 617.834.8205 or [email protected].

Andrew Oliver, M.B.E.,M.B.A.

REALTOR®

m 617.834.8205

www.OliverReportsMA.com

““If you’re interested in Marblehead, you have to visit the blog of Mr. Andrew Oliver, author and curator of OliverReportsMA.com. He’s assembled the most comprehensive analysis of Essex County we know of with market data and trends going back decades. It’s a great starting point for those looking in the towns of Marblehead, Salem, Beverly, Lynn and Swampscott.”

“Thank you for the wonderful, wonderful job you do for the community (explanation of property tax process and calculation) – it is so helpful and so clearly explained.”

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