Composite Index
148.4
US average = 100.0
Massachusetts (MA) | Composite 148.4
Massachusetts Cost of Living 2026
Massachusetts sits at 148.4 on the 2026 C2ER cost of living index, the second-highest in the continental US after California. Housing is the dominant driver at 210.5 (more than double the national average). The 2023 Fair Share Amendment added a 4 percent surtax on income above $1 million on top of the flat 5 percent state income tax. Boston metro carries the cost; outside Greater Boston, the state runs closer to (still above) the US average.
Composite 148.45% income tax + 4% >$1MHousing index 210.5
Median Home
$598,700
2BR rent $2,280/mo
Median Income
$89,645
Household, Census ACS
Category breakdown
All 6 categories vs national average
| Category | MA index | National avg | Difference |
|---|---|---|---|
| Housing | 210.5 | 100.0 | 110.5% |
| Groceries | 107.5 | 100.0 | 7.5% |
| Utilities | 138.5 | 100.0 | 38.5% |
| Transportation | 112.8 | 100.0 | 12.8% |
| Healthcare | 118.2 | 100.0 | 18.2% |
| Miscellaneous | 117.2 | 100.0 | 17.2% |
Sources: BEA Regional Price Parities, C2ER Cost of Living Index, Census ACS 5-year (median income, home value), Massachusetts Department of Revenue (income and sales tax), EIA (electricity rates), KFF (uninsured rate), Zillow ZHVI, Massachusetts Comptroller.
Pros / offsets
What works in Massachusetts.
Strong wages. Median household income $89,645 is among the highest in the country, well above the US median. Boston metro tech, biotech, finance, and academic salaries cluster with the Bay Area and Seattle. BLS OEWS shows median wages in technical and finance occupations 30-45 percent above the national median.
Universal healthcare access. Uninsured rate 2.9 percent per KFF, lowest in the country. The 2006 Massachusetts health insurance reform (which predated and modelled the ACA) created a high-functioning marketplace with mandate-driven near-universal coverage. The state has not let the system erode.
Excellent education. Massachusetts public schools rank consistently #1 or #2 nationally on NAEP testing. Per-pupil spending is high (third-highest in the country) and the state has historically had strong teacher salaries and rigorous standards. For families, the schools are a real (and partly priced-in) reason to absorb the cost.
Flat income tax structure (mostly). Outside the 4 percent millionaire surtax, the state income tax is a flat 5 percent. No graduated brackets to navigate; the Department of Revenue forms are simple. Long-term capital gains receive standard 5 percent treatment.
Cons / drivers
Where Massachusetts costs more.
Boston housing is the dominant cost driver. Housing sub-index 210.5 statewide, more than double the US average. Median home statewide $598,700; Boston-Cambridge-Newton MSA median runs $720,000-plus per Zillow ZHVI. Greater Boston has been chronically supply-constrained for decades; the MBTA Communities Law passed in 2021 attempted to force suburban multifamily zoning but adoption has been slow.
4 percent surtax on income above $1 million. The 2023 Fair Share Amendment (the so-called millionaire's tax) added a 4 percent surtax on individual income above $1 million, on top of the flat 5 percent. The effective top marginal is 9 percent. For founders, senior executives, and equity-heavy compensation cases, this is material. The threshold is indexed annually for inflation.
Utilities are expensive. Utilities sub-index 138.5. Average residential electricity rate 28.58 cents per kWh per EIA, third-highest in the continental US after California and Connecticut. Winter heating costs are substantial because of cold New England winters. Average residential bill in MA exceeds $185 per month.
Property tax above average but not extreme. Effective rate 1.12 percent per the Tax Foundation. On the $598,700 median home, the typical annual bill exceeds $6,700. Proposition 2 1/2 (enacted 1980) caps total municipal tax levy growth at 2.5 percent per year, which constrains property-tax escalation but also constrains municipal budgets in slow-growth communities.
Tax + benefit signals
Massachusetts tax and access overview
State income tax
5% + 4% surtax >$1M
Graduated or flat
Property tax effective
1.12%
Of assessed value, annual
Sales tax (state)
6.25%
Local can add 1-4% more
Uninsured rate
2.9%
Medicaid: expanded
Metro variation
State averages mask city variation.
Massachusetts state composite 148.4 averages substantial regional variation:
Boston-Cambridge-Newton: Roughly 165-185 on the Regional Price Parity scale. Median home in Boston MSA $720,000-plus. Cambridge, Newton, Brookline, and the Boston-proper neighborhoods of Back Bay, Beacon Hill, and the South End regularly exceed $1.4 million for single-family detached.
Worcester: Roughly 115-125. Median home Worcester MSA around $425,000. Forty miles west of Boston with commuter rail access (MBTA Worcester Line). Substantially cheaper than Boston while still expensive by national standards.
Springfield: Roughly 100-110. Median home around $310,000. Western Massachusetts industrial center, anchored by MassMutual and Baystate Health. Cheapest major Massachusetts metro by housing.
Cape Cod / South Coast: Roughly 125-145. Median home around $625,000 (year-round) with seasonal vacation-home demand pushing waterfront pricing to $1.5 million-plus. Hyannis, Falmouth, and Sandwich anchor the year-round economy.
Berkshires (Pittsfield, North Adams, Williamstown): Roughly 95-105. Median home around $325,000. Cultural-tourism economy (MASS MoCA, Tanglewood, Williams College). The cheapest part of the state and increasingly a retirement and remote-work destination.
North Shore (Salem, Beverly, Marblehead): Roughly 130-145. Boston commuter belt with substantial historic-residential premium.
Frequently Asked
Massachusetts cost of living, answered
What is the Massachusetts income tax rate?
Flat 5 percent on most income, with an additional 4 percent surtax on individual income above $1 million (the 2023 Fair Share Amendment, sometimes called the millionaire's tax). The effective top marginal is 9 percent on income above $1 million; the $1 million threshold is indexed for inflation. Long-term capital gains receive standard 5 percent treatment; short-term gains and some collectible-gain categories are taxed at 12 percent. The Massachusetts Department of Revenue publishes the full schedule.
Why is Massachusetts housing so expensive?
Chronic supply constraint. Greater Boston has under-built relative to demand for decades, driven by restrictive suburban zoning, large minimum-lot requirements, and limited mass transit capacity beyond the inner core. The 2021 MBTA Communities Law required 175 transit-served municipalities to adopt multifamily-permissive zoning, but compliance has been uneven and the new supply has been slow to materialise. Demand is strong from tech (Kendall Square, Cambridge), biotech (Cambridge, Watertown, Waltham), finance (Boston, Wellesley), and the universities.
Is Massachusetts education quality really worth the cost?
On NAEP testing, Massachusetts public schools are consistently the top-performing state in the country. Per-pupil spending is third-highest. Teacher pay is among the highest. The MCAS standards require demonstrated proficiency for high school graduation. For families with school-age children, the school quality is a meaningful (and durable) reason to accept the housing cost. Charter and parochial-school networks add further options.
How does Massachusetts healthcare cost compare?
Healthcare sub-index 118.2 statewide. The 2006 Massachusetts health insurance reform created a mature individual marketplace; uninsured rate is 2.9 percent per KFF, lowest in the country. Premiums are moderate relative to other high-cost states. The Massachusetts General Hospital, Brigham and Women's, Dana-Farber, and Beth Israel Deaconess provider networks are top-tier in the country. Out-of-pocket cost discipline depends on plan choice.
Should I commute from New Hampshire to Boston for the tax saving?
The math works for some. New Hampshire has no state income tax on wages; the I-93 commuter corridor (Salem, Derry, Hudson, Bedford, Manchester) lets workers earn a Massachusetts salary while paying NH income tax (zero, modulo the now-repealed interest-and-dividends tax). Massachusetts attempts to tax NH residents on income earned while physically working in MA; the 2020-2022 COVID-era remote-work tax fight was eventually resolved by the courts. NH housing is cheaper than equivalent Massachusetts suburbs, and the saving on $200,000 of income is roughly $10,000-12,000 per year. The trade-off is the commute and lower-quality NH schools in some districts.
Is Western Massachusetts a viable cheaper alternative?
Yes, for the right buyer. Springfield, Pittsfield, and the Berkshires run 30-50 percent cheaper than Greater Boston on housing. The trade-off is distance from the Boston job market; remote work makes this viable for many knowledge workers, but in-office roles in Boston make Western Mass impractical. Healthcare networks in Western Mass are decent but smaller than Boston. The Berkshires have a strong cultural-tourism economy (Tanglewood, MASS MoCA) that supports retiree and second-home demand.
Should I move out of Massachusetts to a cheaper state?
Depends on the salary structure and life stage. For high earners with concentrated equity compensation, the 4 percent surtax on income above $1 million is a real consideration that has driven some relocation toward New Hampshire, Florida, and Texas. For dual-income knowledge-worker households with school-age children, the Massachusetts school quality and healthcare access often justify the cost. For retirees, the property tax bill on a paid-off home in a high-value Boston suburb can be the bigger pressure than the income tax. The /calculator page lets you compare net.
How does Massachusetts compare to other top-quality school states like Connecticut and New Jersey?
All three are top-tier on NAEP testing and per-pupil spending. Massachusetts consistently leads, with Connecticut and New Jersey close behind. The cost-of-living comparison: Massachusetts 148.4 vs Connecticut 112.8 vs New Jersey 115.2 on the C2ER composite. Connecticut and New Jersey are meaningfully cheaper than Massachusetts on housing in many suburbs (Fairfield County CT and Bergen County NJ being the exceptions), but both have higher property tax (CT 1.63 percent, NJ 2.23 percent) and broadly similar income tax. For families optimising for school quality and willing to absorb the cost, Massachusetts comes out on top; for families willing to accept slightly less-elite school quality for lower housing cost, Connecticut shoreline or central NJ are competitive options.