A tax deferral permits an elderly taxpayer to defer payment of all or a portion of their tax obligation.
Unlike an exemption, which discharges a tax obligation, the deferred property taxes must eventually be paid to the town upon the death of the taxpayer or sale of the property.
The Clause 41A* tax deferral option should be considered when a taxpayer’s current expenses make the continued ownership of his/her home difficult. However, because of the 8 percent interest applied to the deferred taxes, deferral may be more expensive over time than the payment of the tax. The deferred amount will become a lien on the property.
It is also important to note that tax deferral may be used in conjunction with other exemption programs.
How long may taxes be deferred?
A taxpayer that qualifies may defer payment of all or a portion of the taxes each year at 8 percent interest, provided that the total of the deferred taxes and accrued interest does not exceed 50 percent of the applicant’s proportional share of the fair cash value of the property.
- Reached the age of 65 as of July 1 of the tax year
- Must have had a domicile or legal home in Massachusetts for the preceding 10 years
- Must have owned and occupied the subject property or other real property in the Commonwealth as a domicile for at least 5 years
- Must be domiciled as of July 1st in the property that is the subject of the application
- Gross receipts from all sources cannot exceed $40,000
How do I apply?
Applications must be filed annually with the Board of Assessors on or before December 15th, or three months after the actual tax billed are mailed, whichever is later. Filing an application does not entitle the applicant to a delay in tax payment.
*Massachusetts General Laws, Chapter 59, Section 5, Clause 41A