Commercial property tax rates: wide variations in Essex County

While most of us look at residential tax rates, far fewer are concerned with commercial tax rates. Yet a healthy commercial business environment can contribute significantly to the attractiveness of a town. The map below shows commercial rates in each of Essex County’s 34 cities and towns, followed by a table comparing residential and commercial rates.

Commercial tax rates

Source: Mass Dept of Revenue

Commercial vs Residential rates
This table shows the residential and commercial rates and the percentage by which the commercial rate exceeds the residential one:
Property tax rates

Property tax rates

Source: Mass Dept of Revenue

There is a bigger variation in commercial rates than in residential rates
The lowest rate for both residential and commercial rates is Nahant’s $10.46, but while the highest residential rate is Amesbury’s $19.95, there are 12 towns with commercial rates over $20, with the highest being $33.59 in Lawrence. 20 towns set the same rate for both residential and commercial, while in 3 towns the commercial rate is more than double the residential one.

Why do some towns have different residential and commercial tax rates?
Cities and towns have the ability to increase the percentage of the total tax bill paid by commercial (and industrial and personal) property owners. The percentage of the value of property classified as commercial varies enormously from town to town. In Marblehead,  for example, where residential property is almost 95% of the total, a 50% tax shift to commercial would increase the average commercial tax bill by $3,179 while reducing the average residential tax bill by only $179. Towns with a higher percentage of commercial property are more likely to shift an increased share of the tax bill to commercial owners.

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