Boston Mayor Michelle Wu’s making a new push to reduce sticker shock for residential property owners when the next tax bills come out in January.
The mayor’s administration projects that Boston average single-family homeowner will face a fiscal year 2026 tax increase of 13 percent—up from last year’s figure of 10.4 percent. For all residential owners, last year’s increase was 14.9 percent.
Because the bills being sent in January and in April of next year are for the last two quarters of FY 2026, property owners will have to pay the four-quarter increase in two bills.
NEW: Boston tax shift plan boxed in by State Senate, via State House News Service
At a briefing on December 2, Wu said the average increase for single-family homeowners would be $780. Officials also note that, from FY2023 to FY2026, the property tax bills for those homeowners have increased by 34 percent.
Within limits set by state law, Boston is allowed to set a different tax rate for different classes of property. Since 2019, assessed values have increased for the residential class of properties, while lagging or even decreasing for commercial properties. For FY2026, the city projects that overall values for the residential property class will increase by 6 percent, with commercial values down by 2 percent. The tax assessments reflect values as of January 1, 2025.
A home rule petition sent to the State House last year by the mayor and City Council would have adjusted the range of tax rates for different property classes over a three-year period to provide more relief for residential owners. Wu said the object was to limit the residential increase to 9 percent, but her administration was criticized last year for saying the amount could have been higher—in what she insisted this week had only been “worst case” estimates.
Wu also maintained that the legislature could pass the home rule measure already filed, with language allowing for amendments.
As Wu has repeatedly noted, former mayor Thomas Menino led the effort to gain State House approval for a residential tax relief similar measure in 2003. At the time, Boston’s residential property values were rising, while a national economic slowdown squeezed commercial values and reduced state aid for cities and towns.
A key opponent of the home rule measure one year ago, State Senator Nick Collins (D-South Boston/Dorchester) issued a statement today calling for Wu to release more details on the newest property assessments.
“Unfortunately, the City has committed to raising property taxes on everyone during a time of financial strain,” Collins said in the statement. “At the same time, the City is once again withholding critical valuation data from policymakers and the public.”
Collins said he also favors other kinds of tax relief.
“The Senate has proposed measures that deliver meaningful relief to homeowners without jeopardizing our economy,” he suggested. “These include rebates and other targeted relief designed to help seniors and our most vulnerable. I hope the City will support these common-sense solutions that provide relief to homeowners without putting our economy at risk.”
The Boston Policy Institute (BPI) concluded that the new tax figures confirm the possibility outlined in its July 2025 report that declining office values would cost the city hundreds of millions of dollars in revenue from commercial properties. In a statement December 3, BPI’s executive director, Gregory Maynard, said that, based on the mayor’s numbers, “Boston appears headed to our worst-case scenario.”
As with the measure filed by Wu, Menino’s effort met with opposition from business leaders. Last year, city councilors also added provisions to protect businesses in neighborhood commercial centers, where smaller decreases in property values threatened higher taxes–often billed directly to business owners.
In Boston’s core, values for commercial space have fallen since the Covid-19 pandemic. Although the shift from in-person retail to e-commerce had begun even earlier, demand for office space was also sapped by the shift to remote work—a trend that has partially been reversed.
Due to the divergence in property value trends, there has been a progressive shift in Boston’s tax burden from the commercial class to residential. In FY24, the share of the levy paid by the commercial class, according to city officials, was 58.3 percent, with 41.7 percent for residential. For FY2026, the projected figures were 53.9 percent for commercial and 46.1 percent for residential.
In reports for the third quarter of 2025, signals for Boston commercial real estate (CRE) are mixed.
The CRE services firm Cushman & Wakefield noted “sluggish” job growth and an increase in unemployment in the Boston area. The vacancy rate was reported to have risen by 18.4 percent, though that also reflected an increase in new, “largely uncommitted” space at South Station Tower and 10 World Trade.
Cushman & Wakefield did highlight “bright spots,” which were also mentioned in the Q3 report from the CRE services and investment firm CBRE—especially the space for relocation to Boston by the toy company Hasbro. CRE’s report showed little change in Boston’s office vacancy rate for the quarter, but there was the sharpest quarterly uptick in the gross asking rent since 2019.
“A staggering 1.91 million sq. ft. of office leases were signed in downtown Boston during Q3,” CBRE explained, “which represents the highest amount of quarterly leasing velocity since pre-pandemic levels in 2019, due to several deals over 100,000 sq. ft.” CBRE noted that “leasing velocity” was increasingly concentrated in more desirable “Class A” buildings. But it also found a “substantial improvement” over the previous quarter in absorption of space in the Central Boston Business District.
In its Q3 outlook, the global real estate services company JLL concluded, “Looking ahead, we foresee a modest decline in vacancy rates and upward pressure on asking rents due to the last two developments delivering and premier space being in high demand. In the city, a 77% increase in the number of full-floor tenants in the market during Q3 will lead to incremental improvements in leasing activity and occupancy moving forward.”
At the December 2 briefing, the mayor contrasted declining tax bills for some “trophy” commercial properties with the rising tax burden on the residential class—including longtime homeowners living on a fixed income. To illustrate, she invited comment from Lillie Bryan, a Dorchester homeowner and member of the Mass. Senior Action Council
“Living on a fixed income can be very stressful, especially when the cost of everything keeps going up,” said Bryan. “The average social security check for a retiree in Massachusetts is $2,000 per month, which means many are surviving on much less this year.”
Another response by the city to the shifting tax base–and drop added in revenue from new construction–has been to slow its budget growth. Last year’s operating budget increase, according to Wu, was 4.4 percent, much of that related to fixed costs beyond departmental spending.
“This year’s budget will be even tighter as we’re looking at federal funds continuing to be withheld or withdrawn,” Wu said at the briefing. “And so we are asking departments also in the city to submit budgets that would reflect slower hiring, continued elimination of different vacancies.”
After the briefing, Wu sent a letter to enlist support for the tax adjustment from business groups. In an initial reaction to the letter, the CEO and president of the Boston Municipal Research Bureau, Steve Poftak, wrote, “The Boston Municipal Research Bureau appreciates the letter from the Mayor’s Office and will carefully analyze the data presented. In particular, we view the City’s guidance for limiting expenditures in the upcoming budget as an important development and share the view that the City is navigating challenging circumstances.”
But this year’s tax decisions are also affected by Trump administration policies and budget decisions and signs of an overall economic slowdown in New England. Wu pointed to the effect on everything from consumer spending power to economic activity and growth being increasingly squeezed by federal funding cuts, as well as policies around trade and immigration.
“Even policies around immigration, or tariffs, or threats to annex Canada, have had an impact on tourism in Boston and their foot traffic, and how our small businesses are doing,” Wu said. “We have seen the illegal threats to cut funding for research and much of the work that’s happening in higher education and health healthcare concentrated here in Boston have led to uncertainty and, sometimes, successful outcomes through the legal system and through lawsuits–but a cloud of uncertainty over all of that.”
