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The Division of Local Services in its publication City and Town yesterday reported on average single-family tax bills and property values for the fiscal year that ended June 30, 2011.

Given the fiscal confines of the state's property tax limitation law, Proposition 2 1/2, it was not surprising to see that the average property tax bill increased a modest 3.35 percent in FY11. 

Proposition 2 1/2 allows for annual tax levy growth of 2 1/2 percent, plus additional property tax revenue coming on line from new growth and/or Proposition 2 1/2 overrides. The rate of increase in average property tax bills in FY10 was 3.3 percent.

And given the relative stability in property values — Massachusetts has not experienced anything like the steep drop in property valuation seen in states such as Florida  or California — it was not surprising to see a decline in single family property valuation in Massachusetts of 3.23 percent.

As the City and Town story reports, Massachusetts has indeed seen a decline in average single family home valuation since the housing bubble burst in 2008, but the tumble downward has been quite gentle compared with other locales.

The story includes a chart with comparison data for tax bills, valuations, and rankings for the state's cities and towns.

More historic information is available in DLS' Municipal Data Bank in the event readers want to explore trends going back to 1981.

The DLS story makes the point that as property valuations increase, tax rates go down, but when those same valuations go down, as they have in recent years, tax rates go up. There are still many homeowners in Massachusetts who assume that when home valuations go down, property taxes go down as well. However, under Proposition 2 1/2, tax levies are allowed to increase regardless of the direction of property valuations.

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