To Grandmother’s house, tax deferred
December 5, 2009 in Taxes
Over the river and through the woods… are you singing yet? Do you have older relatives living in Massachusetts who have a low income? Would your grandmother stay in her home longer if her property taxes were deferred?
Low-income home-owning senior citizens in Massachusetts find it hard to make ends meet. Social security and savings do not go far enough for many. Even when their mortgage is paid up, home-owners still find themselves strapped to pay for heat and repairs and, of course, property tax.
There are two things everyone has to face, death and taxes, right? You can’t necessarily postpone death, but you can defer your taxes. Massachusetts has this law, Chapter 182, § 14 of the Acts of 2008 (G.L. c. 59, § 5(41A)) which spells out guidelines for property tax deferral for low-income seniors.
Property tax deferral could be a solution for many more seniors, if they knew about it, if the income limits were raised and the interest rates lowered. Unfortunately, relatively few Massachusetts residents use this program, largely because it is not well known. For example, in FY 07, only six Medford residents took advantage of it.
So, please send this post to anyone you know who could benefit from this program. It could help someone you know make ends meet this winter and beyond. If you think you might qualify for this, call your tax office.
The guidelines allow municipalities to tailor the maximum income level and the interest rate collected based on the needs of their town or city.
Here are the rules:
Qualifying property owners over 65 years of age (by July 1) may defer payment of their property taxes until the property is transferred or the owner dies.
To qualify, seniors must have a gross income of less than $20,000, unless that limit is raised by the community. In 2007, the maximum limit a community could set was $40,000. In 2008, it was raised to $49,000, or to index it to the circuit breaker amount, which increases annually.
In addition, communities can choose to lower the interest rate paid on deferred taxes from the maximum 8 percent. (For example, in my district, Woburn has chosen 4 percent, and Winchester recently voted to lower its rate to 5 percent. Medford’s rate currently is 8 percent.)
Posted by Rona Fischman
http://www.boston.com/realestate/news/blogs/renow/2009/11/to_grandmothers_1.html
