Proposition 2½

A town can increase its allowable property tax levy beyond the base 2.5% increase by adding the value of "new growth.

New Growth - Additional tax revenue from new construction, property improvements (additions, renovations), subdivisions or new lots, and Other taxable property increases (e.g., personal property from new businesses).

Excess levy capacity

Often referred to as "excess levy limit" is the difference between the maximum amount of property taxes a Massachusetts municipality is allowed to levy under Proposition 2½ and the amount it actually chooses to levy in a given year.

Levy definition table