HomeMy WebLinkAbout2018-07-27-REPSC-rpt Lexington Review of Two Potential Residential Tax Mitigation Tools
The Lexington Residential Exemption Policy Study Committee is evaluating two proposals either or both of
which could be adopted which, if adopted, would impact Lexington property taxes: (a) Residential
Exemption and (b) Senior Means-Tested Residential Exemption. The committee's charge is to
"analyze if adopting the exemption could help reduce the property tax burden and make it easier for
residents to remain in their homes."
(a) Residential Exemption
Under a residential exemption, all owner occupied residential parcels would subtract a fixed amount from
the assessed value before applying the tax rate. This would typically result in a tax reduction.
To keep total Lexington revenue neutral, the residential property tax rate would increase by an amount to
compensate for the exemptions.
The net effects on residential parcels include:
• Owner occupied low assessment parcels would receive a reduction in taxes.
Parcels with high assessed values would pay a net increase in taxes.
• Non-owner occupied parcels (including apartment buildings) would always pay an increase in taxes.
• The statutory tax rate would increase.
The Lexington Selectmen establish the flat exemption amount annually.
15 Cities and Towns in Massachusetts have a residential exemption, with the most comparable community
to Lexington being Brookline.
(b) Senior Means-Tested Residential Exemption
The senior means-tested residential exemption requires that the beneficiary be a senior citizen, with limited
income, limited assets, an owner-occupied home below the community median, and have lived in the
community more than ten years. If all criteria were met, the senior's property taxes would be reduced,
offset by other residential property owners.
The effects are similar to the residential exemption, but due to its targeted nature the impact is smaller.
Rather than thousands of affected properties the number would be under 1000. Net effects include:
• Some seniors living in their own homes would realize a reduction in taxes.
Seniors above financial thresholds and all other properties would pay a small increase in taxes.
• The statutory tax rate would increase a small amount.
Sudbury, Concord and Reading currently have a senior means-tested exemption, which was approved by
the legislature. To offer this program, Lexington would seek approval from the legislature.
Taxed residential properties in Lexington include single family homes, muti-family homes, apartment
buildings, condominiums, residential land, and for-profit residential facilities (such as child care).