BOSTON – Senator Michael O. Moore (D-Millbury) announced that the Massachusetts Senate passed S. 1494, An Act increasing the property tax deferral for seniors, sponsored by Senator Patricia D. Jehlen (D-Somerville). This legislation 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.
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.
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.
An amendment to the bill, sponsored by Senator Ken Donnelly (D-Arlington), was adopted, extending the time period of the deferred property tax rate for elders and active duty personnel to one year after the death of the property owner receiving the deferment in order to allow for probate and the settling of any will. This gives heirs time to either sell the property or pay the taxes before the interest rate rises up to 16% on deferred taxes, which sometimes acts as a deterrent for many elderly people who are concerned for the burden it may put on their heirs; additionally, the 16% rate is a carryover from a different era and is out of line with current interest rates.
Senate Minority Leader Bruce Tarr (R-Gloucester) sponsored an additional proposal to include a provision for enhancing the property tax work-off program available to older adults in many communities.
The bill was unanimously passed with a 35-0 vote and now moves to the Massachusetts House of Representatives for their consideration.