Boston’s Tax-Exempt Property Snapshot

Boon to the economy with most successful PILOT program

Tax-exempt institutions play a critical role in Boston’s economy and the city in general. In its bond credit report in May for Boston, Moody’s Investors Service stated that the concentration of tax-exempt higher education and hospital institutions “provide economic stimulus” and the City “benefits from the sector’s stable employment base.” The five largest employers in Boston are all tax-exempt institutions, which represent 7.4% of total Boston employment.

PILOT Program – Most Successful  – Boston’s PILOT program has been touted as the most successful program in the country in terms of revenue generation.*   Tax-exempt properties in Boston made PILOT payments totaling $53.6M in FY17.  The breakdown of this total included $33.4M from private exempt institutions, $18.5M from Massport and $1.7M in miscellaneous payments.

Tax-Exempt Overview – Tax-exempt real property in Boston represents 52% of all land area in the City and 35% of its total real estate property value.  Publicly owned tax-exempt property accounts for 78% of the city’s exempt land area, while private institutions account for 22%.

Exempt Land is Mostly Public – Public land owned by the Commonwealth, City, U.S. Government and foreign jurisdictions represents 78.1% of all tax-exempt real property in Boston.  In total, publicly owned tax-exempt real property represents 40.4% of all land area in the City.

 Private Exempt Land – Private tax-exempt property makes up 21.9% of total tax-exempt land and 11.3% of total city area. Medical, educational and cultural institutions constitute about 5.7% of city land, while religious property represents 4.2%.

Boston Tax-Exempt Land Area
Category Area (sq. mi.) % Exempt Area % City Area
US Government 0.38 1.6% 0.8%
MA State 11.27 48.7% 25.2%
Boston City 6.43 27.8% 14.4%
Other Public 0.00 0.0% 0.0%
Total Public 18.08 78.1% 40.4%
Literary 1.67 7.2% 3.7%
Char./Benevolent 0.92 4.0% 2.0%
Religious 1.89 8.2% 4.2%
121-A 0.26 1.1% 0.6%
Other Private 0.32 1.4% 0.7%
Total Private 5.06 21.9% 11.3%
Total Tax-Exempt 23.14 100.0% 51.6%
Taxable Property 21.66 48.4%
Taxable & Exempt Property 44.80 100.0%

Tax-Exempt Value – Boston’s total real estate property value in FY18 is $156.4B, of which taxable real property represents $102.5B or 65.5% and tax-exempt property $53.9B or 34.5%.  The City regularly updates the values of the largest 49 tax-exempt institution with values of $15M or above, but less so for other exempt property.

* Lincoln Institute of Land Policy 2010

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