HomeMy WebLinkAbout2012-TDES-Property Tax Relief for Seniors-rpt
Fiscal Year 2012
Property Tax Relief for
Seniors
Tax relief may be available to you!
Read this booklet
to understand the options
The Selectmen’s Tax Deferral and Exemption Study Committee
Co-Chairs Vicki Blier and Patricia Costello
Robert Addelson, Assistant Town Manager for Finance
Assessor’s Office
Robert F. Lent, Director of Assessing
Elaine Melahouris
Sandra Pentedemos
Human Services
Charlotte Rodgers, Director
Local Property Tax Exemptions for Lexington Seniors
You may qualify for one of the following property tax exemptions. Since only one of these exemptions is
allowed each year, choose the one that provides the maximum bene
Choose One:
Elderly Person Over 65 (clause 41C) * **
If your Income and assets are low-to-moderate, you may qualify for a $1,000 exemption from your
property tax
See pages 3 and 4 for detailed information and help in determini.
Elderly Person 70 or Older or Surviving Spouse (clause 17D) * **
If your income is too high for the 41C exemption but you have low assets, you might qualify for a
$175 reduction in your property tax
70 or older by July 1 of tax year or surviving spouse of any age
Value of Whole Estate (not including your primary residence in Lexington) must not exceed
$40,000.
There is no income limit.
Home must have been owned and occupied as your principal residence for the past 5 years.
Contact AssessorÔs Office at 781-862-0500 X 315 for application
Disabled Veterans, Certain Medal Winners, and Certain Survivors (clauses 22A Ï F) * **
A wide range of exemptions is available to veterans of the armed services
See detailed information on page 5
Blind Persons (clause 37A) * **
If you are blind, you may qualify for a $500 reduction in your property tax
You must own and occupy Lexington property as your primary resid
You must be registered with the Mass. Commission of the Blind prior to July 1, 2011 and
provide a certificate every year with an issue date after July 1
are filing.
Contact AssessorÔs Office at 781-862-0500 X 315 for application
Surviving Spouse of Police Officer or Firefighter (clause 42) * **
If your spouse was killed in the line of duty, and you have not remarried, you may qualify for a total
exemption from your property tax.
Property must be owned and occupied as your primary residence
Contact AssessorÔs Office at 781-862-0500 X 315 for application
Hardship Exemption (clause 18) * **
If you have severe financial and medical hardships in a given year, or financial hardship from a
change to active military status, not including initial enlistment, you may qualify for a special
hardship exemption from your property tax.
Must be on active military status or meet all three criteria of age, infirmity and poverty.
Granted at the sole discretion of the Board of Assessors
Contact AssessorÔs Office at 781-862-0500 X 315 for application
* These benefits are offered by the town but governed under Massachusetts General Law Chapter 59, Section 5.
Clause numbers refer to clauses under this statute.
** If your home is held in trust, you must provide a copy of the trust showing that you are a trustee and a copy of the
schedule of beneficiaries showing that you have a beneficial interest. Both the trust and the schedule of
beneficiaries must be recorded at the Registry of Deeds.
.
If you have a non-spouse co-owner or a multi-unit dwelling, contact AssessorÔs Office
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Additional Property Tax Help
These three programs are available to anyone who qualifies, including those who
benefit from a ÑChoose OneÒ exemption
Add any or all of the following:
Administered by the AssessorÔs Office:
Tax Deferral (Clause 41A)
If you have low-to-moderate income, you may qualify to postpone paying your property tax
until your house is sold or conveyed.
Deferrals free up your income for any desired use
You are protected - you will never have to sell or move due to taxes deferred
under this program
See the detailed information on pages 6 and 7
Exemption from the 3% Community Preservation Fund Surcharge
If you have low-to-moderate income, you may qualify for an exemption from the Community
Preservation Act property tax surcharge
See detailed information on page 8
Administered by the Council on Aging
Senior Service Program
A limited number of low-to-moderate income seniors with needed skills can provide service
to the town in exchange for a reduction to their property tax.
Age 60 and older
Income up to $50,000 single, and $52,950 married
Selective program matches skill and ability to department needs
Single taxpayer may earn a maximum of $935. A two person househ
to $1,190.
Contact the Senior Center at 781-861-0194 for more information
Administered by the State
State Senior Circuit Breaker Tax Credit
Senior renters or homeowners with low-to-medium incomes may qualify for direct payment
or tax credits from the State
See the detailed information sheet on page 9
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Detailed Information for Fiscal Year 2012
*Qualifying amounts increase annually *
Elderly Person Over 65 (Clause 41C)
If your income and assets are low to moderate, you may qualify f
a $1,000 exemption from your Property Tax
Age You or your spouse must be 65 or older on July 1, 2011 for Fisca
Benefit $1,000 reduction in property tax. Does not have to be repaid.
Income
Your total gross income must be under $24,097* for single homeow
$36,148* for married homeowners for Fiscal Year 2012
Your income from 2010 is used to qualify for Fiscal Year 2012 ex
A deduction (called the ÑSocial Security DeductionÒ) is allowed if you have
income from Social Security, Railroad Retirement, or federal, Ma
(and political subdivisions) employee pensions, annuities, or re
-The FY2012 ÑSocial Security DeductionÒ is:
Worker: $4,158 Spouse: $2,079 as determined annually by the stat
See worksheet on next page.
Assets
Your Whole Estate must be under $48,195* for single homeowners,
$66,269* for married homeowners.
Whole Estate includes:
-Total of all savings accounts, checking accounts, certificates o
deposit, IRA accounts, annuities, stocks and bonds as of July 1,
-Any real estate other than your Lexington primary residence.
Your primary residence, vehicles, personal effects and cemetery
counted or included.
Ownership
Massachusetts must have been your state of primary residence for the past
and
ten years as of July 1, 2011
Residency
You must have owned and occupied your current home for the past five years
as of July 1, 2011
If your home is held in trust, you must provide a copy of both the trust and the
schedule of beneficiaries showing that you are a trustee and hav
interest. Both the trust and the schedule of beneficiaries must be recorded at
the Registry of Deeds
If you are a joint owner with a non-spouse or your home is a mul
dwelling, contact the AssessorÔs office for further information
To Apply Contact the AssessorÔs office at 781-862-0500 X 315 for an appli
deadline for FY2011 is three months after the first actual tax bill is mailed (on or
about January 1).
st
* Qualifying limits may increase annually with a cost of living adjustment.
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Use This Tree to See If Your Income and Assets Qualify
For the Fiscal Year 2012 Clause 41C Elder Exemption
MARRIED SENIORS SINGLE OR WIDOWED SENIORS
Do you have income from federal, Social Do you have income from federal, Social
Security, railroad or Massachusetts (state Security, railroad or Massachusetts (state
NO
or subdivision) government, annuity or or subdivision) government pension,
NO
retirement plan? annuity or retirement plan?
YES
YES
If you are the “WORKER” If you are the “SPOUSE”
Deduct $6,237 from your 2010
on your pension, deduct on your pension, deduct
gross income to get your qualifying
$4,158 from your 2010 $2,097 from your 2010
income
income to get your income to get your
qualifying income qualifying income
Is your income under
Is your income under
$?
36,148
$?
24,097
YES
YES
Are your assets under $48,195?
Are your assets under $66,269?
(As of July 1, 2011 excluding your
YES
(As of July 1, 2011 excluding your
house, possessions, vehicle and
house, possessions, vehicle and
cemetery plots)
cemeteryplot)
YOURINCOME AND
ASSETS QUALIFY
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Detailed Information
Property Tax Exemptions for Veterans
Benefits for veterans who were Massachusetts residents for six months before
entering service or for five consecutive years before the current tax year
FY2012 exemptions are based on veteran status as of July 1, 2011
Clause 22 $400.
Veterans with VA certificate showing at least 10% disability.
Veterans of the Lebanese peace keeping force or Granada rescue
mission must show receipt of a campaign medal.
Veterans of Spanish War, Philippine and Chinese Expeditions with
discharge other than dishonorable
Veterans having the Purple Heart
Spouses who havenÔt re-married, whose wife or husband qualified
for this or any of the Clause 22 exemptions OR whose spouse lost
his or her life in service.
Parents of soldiers or sailors who lost their lives in service.
adopting, and parents who stood in loco parentis for one year prior
to the time that the deceased entered service qualify. To establ
status as in loco parentis, affidavits from two disinterested parties
who are not relatives must be submitted.
Clause 22A $750.
Veterans who have permanent loss of use of one foot, one hand,
or sight of one eye
Recipients of the Congressional Medal of Honor, The Distinguishe
Service Cross, the Air Force Cross or the Navy Cross
Clause 22B $1,250.
Veterans who have lost or have suffered permanent loss of use of
both feet, both hands, or sight of both eyes.
Clause 22C $1,500.
Veterans who are entitled to specially adapted housing as a resu
of service related disability.
Clause 22D $2,500.
Surviving spouses of service members or guardsmen who died
from injury or disease due to being in combat zone, or who are
missing in action and presumed dead due to combat.
Clause 22E $1,000.
Veterans with yearly certificate from the VA indicating 100%
disability and incapable of working.
(This is the only veteranÔs exemption that requires a yearly cer
PAR 100%
Paraplegics or surviving spouses of paraplegics
To Apply: Contact the AssessorÔs Office at 781-862-0500 X 315.
Filing deadline for FY2012 is three months after the first actual tax bill is mailed (on
or about January 1).
st
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Detailed Information for Fiscal Year 2012
Property Tax Deferrals (Clause 41A)
and associated Water and Sewer Deferrals under Ch. 40, Sec. 42 and Ch. 83, Sec. 16G
Let the value of your house pay your property tax.
Age You or your spouse must be 65 or older on July 1, 2011 for the F
Benefit
Payment of any or all of your property tax and water/sewer charges can
be postponed until the home is sold, conveyed, transferred to a
or your surviving spouse die, or until you choose to pay off the
You can never be forced to move or sell your home under this program.
Use any single property tax exemption for which you qualify first and then
defer all or part of the rest of your property tax.
The fixed interest rate for FY2012 deferrals is 0.26% (simple in
Income Up to $60,000 gross income, married or single based on 2010 inco
Assets No asset restrictions
Ownership
Massachusetts must have been your state of primary residence for the
and
past 10 years as of July 1, 2011.
Residency
You must have owned and occupied a home anywhere in Massachusetts
for the past five years as of July 1, 2011.
Please note: Every other person with any legal or beneficial in
property must give written approval for the deferral (e.g. co-ow
that hold a mortgage, home equity loan, second mortgage, etc.)
Other limits
Property taxes can be deferred to a maximum cumulative total of
value of your homeÈ. many decades of potential deferral
Upon the death of you or your surviving spouse or upon the trans
homeÔs ownership, the annual interest rate on the amounts owed will
increase to 16% until paid.
To apply For Property Tax Deferrals contact the AssessorÔs office at 781-862-0500 X 315.
Filing deadline for FY2012 is three months after the first actual tax bill is mailed
(on or about January 1).
st
After qualifying for the Property Tax Deferral, contact the Boar
781-862-0500 X 208 to apply for deferral of water/sewer charges.
How it works:
Each yearÔs deferral is like an individual loan for that yearÔs tax amount at that yearÔs interest
rate. It is a fair rate, generally 3% below the Prime Rate,* and
than 8%. During your lifetime and that of your surviving spouse, and as long as you own your
home, the interest for the amount you defer in FY2012 will never
As long as you or your surviving spouse continue to qualify, you
agreements for any subsequent yearÔs property tax and water/sewer charges at the interest
rate set for that year.
Why is this an attractive option?
Tax deferrals are a safe and inexpensive way to free up some of
home to pay your property tax and water/sewer charges will allow you to enjoy the use of thousands
of dollars that would otherwise have gone to paying those bills.
---------------------------------------------------------------------------------------------------------------------------------------------------------------------
*
The interest rate is based on the Monthly One Year Constant Maturity Treasury Rate as published by the Federal Reserve Bank for the
first week in March preceding the new Fiscal Year.
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Property Tax Deferral Example
In FY2011, a senior owning a $550,000 house decided to start deferring his/her entire property tax
bill every year. In 2016, he/she decides to sell the house and move into an assisted living facility.
Fiscal House Value 100% of Property Tax Deferral Deferred Tax Plus
Year Deferred Interest Rate Interest
(Projected
(Assumes that taxes increase (Simple Interest rate; (Total from 2010 until
appreciation rate at
at same 7.4% rate as past 10 2011 to 2015 is an house is conveyed in
half of the historic
years. Rate includes all past estimate based on 2015)
rate of past 10 years)
overrides and debt exclusions) average of One Year
Constant Maturity
Treasury Rate as of
March of last 10 years)
2011 $550,000 $8,190 0.34% $8,344
(actual)
2012 567,232 8,799 2.49% 9,792
(hypothetical)
2013 585,003 9,453 2.49% 10,286
(hypothetical)
2014 603,331 10,156 2.49% 10,798
(hypothetical)
2015 622,234 10,911 2.49% 11,330
(hypothetical)
2016 641,729 11,722 2.49% 11,881
(hypothetical)
Value of House when Total Cost of Six Years
Conveyed of Deferral
$641,729 $62,431
House Value when sold: $641,729
Minus total cost of deferral: - $62,431
Equals equity left for use by senior: $579,298
$550,000 house
A will likely
$579,000 left
have more than
after six years of appreciation
and repayment of deferred taxes and interest.
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Detailed Information for Fiscal Year 2012
Exemption from
the Community Preservation Act Surcharge
for those aged 60 and over
Age Applying owner must be 60 or older on January 1, 2011
Benefit 100% exemption from the surcharge
Gross Income
Use your 2010 household income to qualify
Household FY2012
Size Income
Limit*
1 $ 67,600.00
2 77,200.00
3 86,900.00
4 96,500.00
5 104,200.00
6 111,900.00
7 119,700.00
8 127,400.00
(Different income limits apply to taxpayers under age 60)
Assets There is no asset limit
Ownership and You must own and occupy the home as your primary residence as of
Residency January 1, 2011.
To Apply Contact the AssessorÔs office at 781-862-0500 X 315 for an
application. Filing deadline for FY2011 is three months after t
actual tax bill is mailed (on or about January 1).
st
*
The income limit changes every year. It is based on the local
annually published by United States Department of Housing and Urban Development.
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Detailed Information
This chart shows 2011 income and benefit figures
2012 figures will be published in early FY2013
Qualifying amounts and benefit change annually
Massachusetts ÑCircuit BreakerÒ Tax Credit
This is a State program administered by the Commonwealth of Massachusetts
Department of Revenue at 617-887-MDOR (617-887-6367)
www.dor.state.ma.us
If your property tax (or 25% of your rent) exceeds 10% of your gross income, you may
be eligible for a payment or tax credit from the State.
Age 65 years of age or older at close of tax year
Benefit Homeowners: One dollar for every dollar that your property tax plus half o
water and sewer bill exceeds 10% of your income.
Renters:One dollar for every dollar that 25% of your rent exceeds 10% of your
income. Rent must be unsubsidized and landlord must be a tax-paying entity.
Maximum benefit: $980*
Income
$52,000* for a single individual,
$65,000* for a head of household
$78,000* if married and filing jointly.
Married filing separately is ineligible
House Value/
Assessed value of house $729,000* or less
Assets
Otherwise, no asset limit
Ownership
Renters receiving rent subsidies do not qualify.
And
Landlord must be a tax-paying entity
Residency
Special provisions are made for certain assisted living arrangements and for
certain types of trust ownership. See state website for more inf
www.dor.state.ma.us
Your Massachusetts house or apartment must be your primary resid
To Apply Taxpayers or Renters who are eligible for this tax credit should
when they file their state income tax return. If you are eligib
normally file a state income tax return, you may obtain the bene
return and claiming the exemption. Past returns may be amended up to 3 yrs.
LexingtonÔs Senior Center provides trained tax advisors during the tax filing
season who can help you apply for this benefit. Call
781-861-0194
* The 2012 income limits and benefit amounts will be set by the state in the second quarter of
fiscal year 2013.
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