In some parts of the United States, homeowners welcome the increase in wealth, but they could do without the high tax payments that come with it: As the Associated Press reported in June, some fear losing their property due to the sudden burden.

Here in Massachusetts, the median sales price of a single-family home in Greater Boston rose to a record $950,500 in May, according to a June 18 report from the Greater Boston Association of Realtors.

Statewide, the average single-family home tax bill in fiscal year 2024 was $7,400 — a rise of about 19 percent since 2019, when bills averaged $5,993, according to data from the state Department of Local Services. (The total is about 3 percent higher than the increase in the previous five-year period between 2014 and 2019.)

“We have a lot of residents, older residents who have been here since the beginning of time, who are being pressured to pay taxes,” says Kathleen Costello, director of the Massachusetts Association of Assessing Officers and a former tax assessor for Mattapoisett, where she lives.

Lawmakers on Beacon Hill have also taken notice of the crisis.

“Many seniors who bought a home decades ago without expecting it to ever increase in value [has] “Today they are really struggling to pay their local property tax increase,” Lieutenant Governor Kim Driscoll told the Globe.

Set 2 ½

Massachusetts law limits how much property taxes can be increased. Under the 1980 ballot law known as Proposition 2½, cities and towns cannot increase their tax revenues by more than 2.5 percent annually without a majority vote to repeal it.

However, this mechanism does not necessarily affect the tax rate that taxpayers pay, Costello said: “The tax rate goes where it needs to go.”

“What I see and have seen in my community is that the [property] Values ​​are rising, [and] “Yes, tax rates are going down, but everything is more expensive,” she said.

And so it can happen that taxpayers pay more year after year, even with lower tax rates.

And cities and municipalities need this money today.

Prices for utilities, construction, health care and collective bargaining agreements, for example, have increased, says Adam Chapdelaine, executive director of the Massachusetts Municipal Association, an organization that supports public officials across the state.

He pointed to the higher number of repeal votes held in cities and towns last spring – more than in previous years – and called it a sign of the times.

The decision to hold a vote was not made lightly, Chapdelaine said. “Every mayor I know, every city manager I know, grapples with the desire to provide an appropriate level of services while ensuring that citizens are not unduly burdened by taxes.”

Abstract?

Are homeowners facing higher taxes actually moving away?

“As for people who can no longer afford the prices and who are moving farther away from Boston or leaving the area altogether because of the cost? Yes,” said Anthony Lamacchia, founder, CEO and broker at Lamacchia Cos., a real estate firm with offices in Massachusetts, New Hampshire, Rhode Island and Florida.

But the decision to move – or the need to do so – just because of the property tax? Not quite, he says.

Rather, people are feeling the financial pressure caused by a whole range of factors.

“Everything is too expensive,” said Lamacchia, “and especially people with variable-rate mortgages … They are more nervous.”

A study published in May by researcher and professor Mark Williams at Boston University's finance department found that the number of residents leaving Massachusetts each year has increased by a dramatic 1,100 percent since 2013, to more than 39,000 people per year.

The 26- to 34-year-old age group is the largest group leaving the state, at 31 percent, according to the study. The third largest group (and the largest by adjusted gross income) is the 55- to 64-year-olds, at 16 percent, while retirees – 65 years and older – make up just 9 percent.

“The rapid increase in outmigration from Massachusetts is evidence that the state is losing its competitive advantage over states that offer lower taxes,” Williams wrote in an email. “As outmigration increases, it will also negatively impact the state's GDP.” According to his report, outmigration is costing the state $4.3 billion in adjusted gross income and $213.7 million in tax revenue in 2020-21.

The reasons for their departure vary, but the study found that the most important ones include housing costs, income taxes and health care expenses.

Property taxes are another example.

“States with more balanced property and income tax rates were able to attract more residents leaving Massachusetts,” Williams wrote.

According to the study, Florida was the most popular emigration destination for former Bay State residents in 2021, followed by New Hampshire, Maine, North Carolina, Texas and Rhode Island. In 10 categories, from cost to education to weather, Florida had the biggest competitive advantage over Massachusetts. Some of the Commonwealth's closest neighbors – New Hampshire, Maine and Rhode Island – also fared better.

Lamacchia has noticed more people moving west within Massachusetts, and to meet demand, his company opened an office in Springfield earlier this year.

“Just like I saw it in Worcester 10 years ago, I see it in Springfield,” he said.

According to Realtor.com, the median sales price for a home in Springfield at the end of June was about $290,000. In Boston, it was $765,000.

The need for resources

Net migration from Massachusetts is a trend that Chapdelaine called “a kind of existential threat to the Commonwealth.”

With smaller populations, local leaders are concerned about how they will fill key public service positions, from police officers and firefighters to librarians and teachers, he said. “Today, we have operational concerns about how cities and towns will recruit the next generation of workers to work in local government.”

Rising property taxes also have a significant impact on income-limited residents, including seniors.

While Driscoll pointed out that these taxes fund important services, from schools to public safety, he added, “People can be rich in houses but poor in money.”

“You're at a point in your life where you're at the lowest income level and, you know, it can barely keep up with the rising property taxes,” said Driscoll, a former longtime mayor of Salem.

Driscoll and Gov. Maura Healey are trying to solve that problem with the Municipal Empowerment Act, a bill their administration introduced earlier this year that is a series of reforms designed to help cities and towns generate the resources they need, attract qualified candidates for the jobs and streamline municipal operations.

The bill also includes a proposal to allow cities and towns to offer larger property tax exemptions to eligible seniors. (Seniors could qualify based on their income and assets, similar to the Senior Circuit Breaker Tax Credit.)

This measure and others focused on affordability are part of the administration's efforts to make the state one where “people can stay in their homes and in their places – and be allowed to grow old with dignity and respect,” Driscoll said.

By the end of June, members of the House of Representatives and the Senate had not yet considered the bill.

“We are certainly strongly committed to this bill,” Driscoll said.

Christopher Gavin can be reached at [email protected]. Follow Address on X at @globehomes and subscribe to our weekly real estate newsletter at Boston.com/Address-Newsletter.