Cambridge Increases Property Taxes for Second Consecutive Year

The Cambridge City Council unanimously voted to increase property tax rates on Monday as part of an ongoing effort to shift the tax burden off of residents.

The Council voted to shift the maximum permitted share of property taxes onto commercial taxpayers, reducing the amount that residential taxpayers collectively must pay in the city. The move will drive a 21 percent increase in commercial rates and a four percent increase in residential rates for fiscal year 2027.

City Manager Yi-An Huang ’05 wrote in a report to the Council that the tax increase “aligns with multiyear targets” set by councilors in 2025, and will help fund “key programs, infrastructure, and services while recognizing taxpayer impacts.”

Property tax levies are the city’s largest source of revenue, making up roughly 65 percent of the total revenue in fiscal year 2026.

Compared to neighboring cities, Cambridge maintains the lowest tax rates for both residential and commercial properties and places the smallest share of its property tax burden on residential properties.

In his report, Huang wrote that the move was made to “safeguard the city’s financial stability, minimize taxpayer impact, and actively promote economic development and evolving market conditions.”

“I wouldn’t say that we don’t have money. We have flexibility that many other municipalities at this point don’t have,” Huang said on Monday. “Our ambitions also continue to exceed our resources. There are so many things that we want to do, and we are facing a really significant economic slowdown.”

But Councilor Catherine “Cathie” Zusy cautioned against further increases to the commercial tax rate.

“We cannot continue to punish the commercial sector with higher tax rates,” Zusy said. “They are our bread and butter, and if we make Cambridge inhospitable, they’re going to go elsewhere.”

The Council’s vote marks the second major jump in the city’s tax rates in recent years. Last year, the city passed a 22 percent increase — more than doubling the increase for commercial properties seen in fiscal year 2025. And Huang said that the city was likely to continue looking at shifting tax rates to help balance the budget in future years.

“Ultimately this is the conversation that we have been in over the last two years, and will continue to be in for, very significantly, FY 28, but probably for a couple of cycles where we need to find some balance and moderation,” Huang said.

The Council also approved an exemption for owner-occupied homes, allowing homeowners to deduct 30 percent of the average residential parcel value from each qualifying property before the tax rate is applied. Approximately 13,380 owner-occupied homes are on file for the exemption in fiscal year 2027.

With the Council having approved both recommendations, the fiscal year 2027 tax levy will be $725,384,189, and a macroeconomic update is expected in October.

—Staff writer Maya Fu can be reached at [email protected].