Massachusetts has long been an attractive destination for homeowners. However, the state's property tax system can be complex, especially when dealing with residential exemptions.
Designed to provide tax relief to homeowners who occupy their property as their primary home, these exemptions have been a vital tool in ensuring housing affordability for many residents.
In this article, we'll discuss residential exemptions in Massachusetts, how they work, and everything you need to know when it comes to your property taxes this year.
What is a Residential Exemption?
A residential exemption (or property tax exemption) is a local tax incentive to eligible homeowners to reduce their property tax burden. The purpose of this exemption is to provide financial relief to residents who own and occupy their homes in Massachusetts as a primary residence.
The residential tax exemption works by excluding a certain portion of the assessed property value from your property tax bill. For example, if a property has an assessed value of $250,000 and the residential tax exemption is set at 20%, the homeowner would be exempt from paying taxes on $50,000 of the property value.
To qualify for the residential tax exemption, homeowners must be legal residents in Massachusetts and meet any additional requirements set by the local government. Second homes, rental properties, or vacation homes typically don’t qualify.
What is the Residential Exemption and Tax Rate in 2023 in Cambridge, MA?
Residential tax rates in Cambridge, MA are very low compared to other regions in the United States. MIT, Harvard University and Sanofi are strong contributors to the Cambridge budget. Commercial, Industrial and Personal Property Taxpayers are paying 2/3rd of all the taxes within the city of Cambridge.
For the fiscal year in 2023, the tax rate in Cambridge is $5.86 per $1,000 of assessed value.
In 2023, the residential tax exemption is $470,823 in Cambridge.
For homeowners who qualify for the full amount, this will reduce your property taxes by $2,759 as of this year. Homeowners living in Cambridge as their primary residence by January 1, 2022 will be eligible for a tax exemption.
Apply for a Residential Exemption in Cambridge
Watch "Ask the City" about our local Real Estate Taxes
And which nearby towns offer it their residents?
Residential Exemptions in Belmont, MA? No.
In Belmont, things aren’t so simple. The Community Preservation Act (CPA) began in 2012 and establishes a fund financed by property tax surcharges and annual distributions meant to preserve open space, rehabilitate historic areas, and support community housing.
However, there are exemptions to the CPA surcharge for homeowners in Belmont. For residential properties, the surcharge is levied against the tax amount–not the value of the property– and has a tax rate of $11.67 per $1,000 of value.
The residential exemption from the CPA is $100,000, which will allow homeowners to reduce their property taxes by roughly $585.
The Town of Belmont offers a variety of state regulated exemptions and deferrals which reduce or postpone property tax obligations for certain qualifying taxpayers. Some examples are: elderly persons, blind persons, disabled veterans, surviving spouse or orphaned minor child, widowed or orphaned minors of police officers or firefighters killed while on the line of duty, and extreme hardship. Click here to access the Tax Abatements and Exemptions in Belmont MA
Residential Exemptions in Arlington, MA? No.
Arlington has many different qualifications for their tax exemption program. Homeowners who occupy their homes as their primary residents may fall under the following qualifications to be considered for a tax exemption:
- Disabled
- Financial hardship
- US Veteran
- Surviving spouse
- Age 65
- Age 70 or older
Depending on your qualifications for the real estate tax exemption program, Arlington homeowners can expect to receive tax relief ranging from $227 to $1,625 when submitting an application prior to the April 1st deadline each year. CLick here for a link to all the tax exemptions in Arlington.
Residential Exemptions in Somerville, MA? Yes.
Residential exemptions are more lenient in Somerville. They allow for an exemption of up to 35% of the average assessed value of residential parcels that are the primary residence of the homeowner.
Similar to Arlington, there are various qualifications that homeowners must meet in order to be eligible for the program. However, the property tax rate in Somerville is $10.19 for $1,000 in 2023 of assessed value and can save homeowners up to $3,455 each year.
Apply for residential exemption in Somerville MA
What is the residential exemption in 2024 in Somerville?
Residential Exemption in Medford, MA? No, not in place.
Medford has Tax Exemption for disabled, veterans' seniors and seniors over 7-. The exemption filing period starts on July 1st. The residential tax rate is $8.65 per 1000 of the assessed value in year 2023.
Visit Medford Assessor's Office
Final Thoughts
Residential exemptions can be an effective way to save on your property taxes in Massachusetts. It’s important to understand whether or not you qualify for the exemption in your area and to understand the guidelines when applying with your tax assessor's office.
Don’t hesitate to reach out to your tax assessor with any questions you have before applying. It may end up saving you time, money, and stress when dealing with property taxes.
The Sandrine Deschaux + CO group will be happy to assist you through the understanding of your options. Just ask.
