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arvard University, the oldest continually operating college in the US, has enjoyed tax-exempt status with the federal government for years. As a 501(c)(3) organization, Harvard, like many colleges and universities, hospitals, and religious organizations, doesn't pay taxes on most of its property holdings, and donors can deduct their contributions from their taxable income. President Donald Trump's recent dispute with Harvard over admissions policies has led him to suggest revoking the university's tax-exempt status, a move that could put its charitable donations and $52 billion endowment at risk.

    The biggest impact of this change would likely be on Harvard's vast real estate holdings in Boston and Cambridge. While the university pays some local property taxes on commercial properties like storefronts in Harvard Square, most of its land – including dorms, classrooms, and athletic facilities – is tax-exempt. Harvard controls nearly 873 acres of land on either side of the Charles River, with over 500 buildings across its campuses in Cambridge, Allston, and Longwood.

    The Arnold Arboretum, a 281-acre nature preserve in Jamaica Plain, is also exempt from property taxes despite having an assessed value of $116 million. If taxed at the current commercial rate, the bill would be over $3 million. Harvard's new Enterprise Research Campus in north Allston will eventually become a significant property-tax payer when completed.

    Local governments in Cambridge and Boston require nonprofit institutions to provide "payment in lieu of taxes" (PILOT) payments to account for city services consumed. In 2023, Boston sought $14 million from Harvard, which contributed over $11 million. If Harvard loses its tax-exempt status, it's unclear how local governments would respond.

    Experts say that any threat to Harvard's nonprofit status would prompt fierce legal action, given the stakes involved. The outcome is uncertain, but one thing is clear: a change in Harvard's tax-exempt status would have significant implications for the university and the cities where it operates.