The Massachusetts Senate recently passed S. 1494, An Act increasing the property tax deferral for seniors, legislation that would offer property tax relief to homeowners age 65 or older across the Commonwealth by proposing to increase the local option cap on income to $80,000.
Older adults statewide face being forced out of their homes due to rising property values that increase tax bills they cannot afford on a fixed income. Residents who own their homes and would like to continue to live in them often have difficulties making ends meet as the years go by and their income loses its buying power. Deferring property taxes gives those seniors an opportunity to avoid making difficult choices of whether they can pay for heat, prescription drugs, or food in addition to the tax bill.
“As our population ages and we work to make our communities more elder-accessible, we must also be mindful that being elder-accessible also means being elder-affordable,” said Senator Jason Lewis. “This important legislation will give our senior citizens urgently needed financial flexibility to help make ends meet and provide relief from the threat of being priced out of their longtime homes.”
Under current law, persons 65 years of age and older have the option to defer paying all or a portion of their property taxes until such a time when their home is sold or conveyed. This is a local option that is capped at the maximum allowance under the senior circuit breaker for a single person who is not head of household ($57,000 for the year of 2015). This threshold is very low given the high cost-of-living in Massachusetts and penalizes “house rich” & “cash poor” seniors living on fixed incomes that exceed this amount.
“There are thousands of seniors across the state who are house rich and cash poor,” explained Al Norman, Executive Director of Mass Home Care. “A property tax bill can be the largest payment a senior sees all year. By being able to defer payment, the town gets its money–with interest—and the senior is able to pay other basic living costs. This bill is like a lifeline for seniors on a fixed income.”
Currently, state law sets a floor of $20,000 in gross income to be eligible for tax deferral, and each community has the option to raise it up to the maximum level of the “senior circuit breaker” income cap for single, non-head of household filers in that given year, as defined by DOR. The municipality can also elect to lower the interest rate below the 8% cap.
The bill was unanimously passed with a 35-0 vote and now moves to the Massachusetts House of Representatives for their consideration.