Agenda Text
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Requesting an adjustment to income limits and interest rates with respect to the senior property tax deferral under MGL c59 s5(41A).
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Official Text
To the Honorable Board:
Clause 41A of M.G.L. Chapter 59 Section 5 allows seniors aged 65 or over to defer all or part of their property taxes provided income limits and occupancy requirements are met. Upon the sale of the home or the passing of the applicant, the deferred taxes plus interest must be repaid by the estate to the City. There is some flexibility within this provision that could potentially make the program more attractive to senior taxpayers.
Our existing requirements for 41A, limit income to no more than $56,000 with 3% interest annually. The income limit can be increased up to a maximum of $86,000 for calendar 2019 affecting FY 2020 applicants per State law. In addition, 41A language allows the selection of an annual interest rate lower than 4%. A few communities like Somerville, including Cambridge, Winchester, and Quincy have adopted rates as low as 3 and 4%. Recently, the City of Newton has raised their income limit to $86,000 and lowered their interest rate to 2.5%. As such, I would recommend the following change
Current 41A income limit and annual rate:
Income limit Interest rate
$56,000 3%
Proposed FY 2020 41A change:
Income limit Interest rate
$86,000 2.5%
Proposed Board orders to increase income limits and lower the interest rate are attached.
Joseph A. Curtatone
Mayor