· By Juan Murray
Property Taxes at Closing When You Sell a Boston Home
When you sell a Boston home, you pay property tax through your closing date and the buyer credits you for any prepaid days after it. Because the fiscal 2026 residential rate was $12.40 per $1,000 and the fiscal 2027 rate was not set as of early November 2026, a fall closing can leave the final tax number open, and your Purchase and Sale Agreement decides who covers any change.
How do property taxes work when you sell a home in Boston?
Boston bills property tax quarterly on a July 1 to June 30 fiscal year, and at closing the tax for that year is split between you and the buyer by the day. You pay through your closing date, and the buyer credits you for any part of a quarter you already prepaid. The wrinkle is timing: the August and November bills are preliminary estimates, the current year's rate first appears on the third-quarter bill due February 1, and that bill carries the year's increase, so a fall closing can leave the final tax number unsettled.
Boston homeowners saw a sharp increase in fiscal 2026, so the tax line is one of the first numbers a buyer's agent checks on your listing. It is also one of the least understood lines on your own settlement statement. Here is how the numbers move when you sell in Jamaica Plain, Roslindale, Hyde Park, Dorchester, or Roxbury.
Key Takeaways
- Boston's fiscal year runs July 1 to June 30, with tax bills due August 1, November 1, February 1, and May 1.
- The August and November bills are preliminary, and the third and fourth bills carry the rest of the year's tax, including any increase.
- At closing, tax is apportioned by the day: you owe through the closing date, and the buyer reimburses you for prepaid days after it.
- The residential exemption applies only to an owner-occupied principal residence, so state whether your listed bill includes it.
- A late bill accrues 14 percent annual interest, rising to 16 percent once certified to tax title, and your attorney pays any balance from your proceeds.
- A fiscal 2027 abatement application can be filed after the third-quarter bill and no later than February 1, 2027.
How do Boston's tax year and quarterly bills work?
Quarterly, with two preliminary bills and two that carry the rest of the year's tax. Boston's fiscal year runs July 1 to June 30, and the city mails tax bills four times a year, due August 1, November 1, February 1, and May 1. Bills go out 30 days before each due date.
The first two bills are preliminary, based on the prior year's value and rate. Under M.G.L. c.59 §57C, the preliminary tax generally cannot exceed 50 percent of 102.5 percent of the prior year's tax. The third and fourth bills carry the rest of the year's tax, including any increase. That is why Mayor Wu said last December that the January bill would be felt as a 26 percent increase over the previous quarter's bill, with a 13 percent annual increase, or about $780 for the average homeowner.
For fiscal 2026, Boston's residential rate is $12.40 per $1,000 of value. The City Council kept the 35 percent residential exemption, which saved qualified homeowners up to $4,353.74 on their fiscal 2026 bills. The exemption applies only to an owner-occupied principal residence. On an $850,000 assessed value, a fiscal 2026 example looks like this:
| Item | Amount |
|---|---|
| Tax at $12.40 per $1,000 | $10,540 |
| FY26 residential exemption (owner-occupant) | about $4,354 off |
| Annual bill for an owner-occupant | about $6,186 |
| Annual bill with no exemption | $10,540 |
The fiscal 2027 rate and exemption had not been set as of early November 2026; last year the council voted in December. The city's numbers point to a tight year. Total assessed value rose just under 1 percent, the smallest gain since 2011, and the city's budget projects only $40 million in new tax revenue from development, the lowest since 2016, according to the Boston Globe. Nobody can tell you today what the third-quarter bill will say.
What happens to property tax at closing in Boston?
At closing, real estate tax is apportioned as of the closing date. You owe the tax for the days you owned the home in the fiscal year, and the buyer owes it from the day after closing. If you paid an installment that runs past your closing date, the buyer reimburses you for the unused days.
Here is an example. Say you close on November 20 on a home with a $6,186 annual bill, and you have paid the August and November installments, which cover July 1 through December 31.
| Step | Days | Amount |
|---|---|---|
| Your share, July 1 to November 20 | 143 | about $2,424 |
| Buyer's share, November 21 to December 31 | 41 | about $695 |
| Buyer credits you at closing | about $695 |
(The daily figure is $6,186 divided by 365, about $16.95.)
The harder question is the part nobody knows yet. If the final tax rises after you close, the third-quarter bill lands with the new owner for a fiscal year you owned for more than four months. Whether you owe a share of that true-up depends on your Purchase and Sale Agreement. One Massachusetts real estate attorney's summary says the Greater Boston Real Estate Board form tells the parties to adjust on the previous year's taxes if the current figure is not known by closing, then readjust later when it is, and that the other common form does not describe comparable language.
Ask your attorney which form your contract uses and what it says about taxes before you sign, not after the bill shows up for the new owner. The guide to the Massachusetts P&S agreement walks through the clauses that move money after closing.
How does property tax affect your price and your buyer?
Buyers price a home by the monthly payment, and tax is part of it. In the City of Boston from June to August 2026, the median sale price was $840,000, the median home took 35 days on market, and 26 percent of sales closed above list price, with 2,072 active listings against 1,159 sales in those three months (MLS PIN via Repliers, June to August 2026). With that much choice, a buyer who finds an unexplained carrying cost will use it to negotiate.
Three tax points help you stay ahead of that:
- State the current annual bill in your marketing, and be clear whether it includes the residential exemption. A buyer who won't live there as a principal residence won't get it, so your bill is not their bill. The Boston residential exemption guide explains who qualifies.
- On a two- or three-family in Dorchester or Roxbury, an owner-occupant and an investor will model very different tax numbers from the same assessment. Have both versions ready.
- Do not promise a buyer a future tax figure. The fiscal 2027 rate is not set, and anything past your current bill is a guess.
What should you do about property taxes before you list?
Take these five steps before your home goes on the market.
- Confirm every quarter is paid. A late bill accrues 14 percent annual interest, rising to 16 percent once the balance is certified to tax title at the end of the fiscal year, per the city's tax title page. Your attorney pays anything outstanding from your proceeds, so a surprise balance shrinks your check.
- Check what your bill includes. Look at whether the exemption is on your current bill so the number in your listing is accurate.
- Ask about proration and readjustment early. Raise the post-closing tax language with your attorney before the Purchase and Sale Agreement is signed.
- Decide whether to file an abatement. If you believe your assessment is too high, a fiscal 2027 application can be filed after you receive your third-quarter bill and no later than February 1, 2027. If your closing falls before then, ask your attorney who would file and who would keep any refund.
- Put prorated taxes on your net sheet. The guide to what you'll actually net when you sell shows where the line belongs, and the net proceeds estimate lets you run your own figures.
Your own numbers depend on your assessed value, your exemption status, your closing date, and your contract language. Juan Murray walks sellers through this math before listing, so the settlement statement holds fewer surprises.
FAQ
Who pays property taxes at closing in Massachusetts?
You pay the tax for the days you owned the home in the fiscal year, and the buyer pays from the day after closing. If you prepaid a quarter that extends past closing, the buyer credits you for the remaining days. The closing attorney calculates this and shows it on the settlement statement.
Why is my Boston property tax bill higher in January?
The August and November bills are preliminary and capped by state law at 50 percent of 102.5 percent of last year's tax. The current year's rate appears on the third-quarter bill, and the third and fourth bills absorb the full increase, which is why the January 2026 bill was expected to feel like a 26 percent jump over the prior quarter.
What if I sell before my January bill arrives?
The city says taxes stay with the property, not the name on the bill, and a bill that arrives in the seller's name should be forwarded to the new owner. Whether you owe a share of any increase depends on the readjustment language in your Purchase and Sale Agreement.
What happens if I owe back taxes when I sell?
Unpaid taxes can become a lien on the property, and interest accrues at 14 percent annually, rising to 16 percent once the balance is certified to tax title. Your attorney pays the balance and interest from your sale proceeds at closing, which reduces what you walk away with.
Does the residential exemption lower what a buyer pays?
Only if the buyer qualifies as an owner-occupant of a principal residence. For fiscal 2027, the city says owners who recorded a deed and began occupying the home between January 1 and June 30, 2026 may also be eligible. An investor buyer will model the full tax at the residential rate, so show both numbers when you market the home.
The bottom line: when you sell in Boston, you pay property tax through your closing date, so confirm every quarter is paid and ask your attorney about the readjustment language before you sign the Purchase and Sale Agreement.
Sources
- MLS Property Information Network (MLS PIN) via Repliers, June to August 2026
- City of Boston, How to pay your real estate taxes
- City of Boston, How we tax your property
- City of Boston, Residential exemption
- City of Boston, How to file a real estate tax abatement
- City of Boston, What is the tax title process
- M.G.L. c.59 §57C, quarterly and preliminary tax bills
- WBUR, Dec. 3, 2025: Wu on the January tax bill
- WBUR, Dec. 10, 2025: Council approves the tax increase and 35% exemption
- Boston Globe, Apr. 30, 2026: development slowdown and tax revenue
- Tim Sherman Law, The Massachusetts Purchase and Sale Agreement
Have questions? Let's connect.
About Juan Murray
Juan Murray is a Boston broker associate with more than 30 years of experience helping buyers, sellers, and investors across Greater Boston, personally leading every transaction from the first conversation through closing.
RE/MAX Real Estate Center · (978) 581-0801
Equal Housing Opportunity. Juan Murray is licensed as a Broker in Massachusetts, regulated by the Massachusetts Board of Registration of Real Estate Brokers and Salespersons. This article is general information only and does not constitute legal, tax, or financial advice. Confirm your specific costs and obligations with your closing agent, tax advisor, or lender.
