The average tax bill for Needham’s 8,400 single-family homeowners will increase by $529, or 3.6%, in 2025. The increase is slightly higher than last year’s $466 average increase, which was the smallest average annual increase in the town since 2017. The Select Board met to certify the tax rate on Tuesday.
At the individual household level, though, property owners may see bills for much different amounts than they paid last quarter when they receive their fiscal year 2025 third-quarter bills during the first week of January.
The changes will result from new calculations based on the dramatic increase in the valuation of nearly all the town’s residential properties, an increase that needed to be recognized for the town to comply with the state Department of Revenue requirement that all property be fully and fairly assessed to reflect true market value.
Collectively, assessments in Needham had not kept pace with the considerable appreciation in value that has occurred over the five years since the last time Needham recertified its valuations. Catching up added some $2.5 billion in value, bringing the overall worth of Needham’s residential property to more than $14 billion.
Those increases will be reflected more significantly in the land value portion of the property tax bill. Property tax bills are based on two values — the value of the land and the value of the building. Land values make up a much larger percentage of a smaller home’s valuation. Due to the land values having increased, town officials say properties with smaller lot sizes will likely see the most significant increases in their bills.
During Tuesday’s Select Board public hearing to certify the tax rate, Board of Assessors Chair John Bulian reported that single-family land valuations increased by an average of 39.9%. He said homes with lot sizes in the quarter-acre range likely experienced even higher percentage increases in their land values. Combined with an average 7.2% increase in building values, the average overall valuation went up 22.3%.
This will generally mean that a homeowner whose overall valuation increased by more than 22.3% will see an increase in the overall bill; those below 22.3% will likely see a decrease. The FY25 valuations can be found at the town website.
Bulian said homeowners with questions or concerns about their bills are welcome to attend the Board of Assessors’ next scheduled meeting Jan. 6, or to contact the Assessing Department.
Also, this does not mean the town will be collecting 22.3% more in revenue. The state’s Proposition 2½ guidelines cap the amount of revenue municipalities can collect from the property tax levy. The total levy will be $192.4 million, which is 4.26% more than FY2024.
The total levy was also boosted by a slightly higher than expected $315 million increase in the town’s “new growth” revenue. New growth is the dollar increase in the annual levy limit generated by new construction, renovations and other increases in the property tax base during a calendar year.
“New growth revenue came in higher mostly due to an uptick in personal property investments, meaning things like business equipment, particularly the media industry and some new business openings,” Deputy Town Manager Dave Davison explained after the meeting.
Conversely, new growth from the residential side was $24 million lower than FY24, which Davison attributed to a drop in residential construction.
The Select Board voted unanimously to certify the rate and also retain the town’s nearly two-decade-old policy of having a “split” tax rate under which commercial properties are taxed at a higher rate than residential properties.
That vote came after Max Woolf from the Charles River Chamber had requested the board consider providing some relief to commercial taxpayers. “We understand why the town has chosen this approach, to help residents and homeowners,” Woolf said. “We respect that.
“But it’s important to remember this choice does come with a cost — a cost that falls heavily on our restaurants, retailers and other small businesses. Even our large employers feel it.”
Needham taxes commercial properties at 175% of assessed value, the highest allowed by state law. This “shift” means residential properties are taxed at roughly 89% of their values.
“If residential and commercial were taxed at a single rate, the average residential tax bill would be $17,532,” said Davison, who said this means the shift saves residents, on average, $1,904.
Other takeaways from the presentation:
- Within the new growth segment, $158 million was residential and $88.6 million was commercial. The balance came from personal property taxes ($69 million).
- The median sales price of a single-family home was $1.55 million. This was an increase of 12.93% over 2023.
- The median condo sales price was $825,000.
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