Eligible Salem homeowners can now have the value of an accessory dwelling unit exempted from their property taxes, under special legislation signed by Governor Charlie Baker.
Homeowners can claim the exemption as long as the amount they charge for rent — including utilities — does not exceed 70 percent of the area’s fair market rent.
Currently, that means the maximum monthly rent would be $1,417.50 for a studio, $1,538.60 for a one-bedroom, and $1,844.50 for a two-bedroom.
“This landmark law will further incentivize the creation of affordable housing units by enabling homeowners to benefit doubly from creating an accessory unit at their property,” said Mayor Kim Driscoll, who proposed the legislation.
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“Not only will they generate a second stream of revenue from rent, but now they can capture further savings on their property taxes by doing so,” Driscoll added.
Approval of the act followed Salem’s recent announcement of a grant program to help homeowners interested in creating an ADU.