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Tax hikes spur worries for older homeowners

In Belmont, a planned $295 million high school will add $1,810 to the annual tax bill of an average single-family home.
In Belmont, a planned $295 million high school will add $1,810 to the annual tax bill of an average single-family home.(Perkins+Will)

The recent passage of tax increases in several Boston area communities is prompting concerns about the impact on seniors and others with fixed incomes.

In the wake of Nov. 6 votes approving debt exclusions for projects in Ashland, Belmont, Natick, Needham, Merrimac, Sudbury, and Wareham, officials in some of the communities said they are hearing from older residents worried about the higher tax bills.

“People have shared that they don’t think they can afford to live in this town much longer,” said Nava Niv-Vogel, Council on Aging director in Belmont, where a $295 million high school will add $1,810 to the annual tax bill of an average single-family home.

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Longtime Belmont resident Edward Kazanjian, 74, supported the school project but said the town needs to provide more relief to seniors or risk having them move out of town.

“It’s very difficult for people like myself to continue to absorb these huge tax increases, particularly as we get older and are paying for people to take care of our snow removal and everything else,” said the retired school administrator.

“We’ve recently had some longtime people in Belmont leave because they can halve their tax bills by moving,” said Kazanjian, who is considering relocating in part due to rising taxes and predicted others will follow.

The average tax bill in Belmont for a single-family home in fiscal 2018 was $12,196.

Belmont Town Administrator Patrice Garvin said that well in advance of the tax vote, officials began exploring ways to ease the impact the measure would have on older taxpayers. That led to the selectmen’s decision in August to increase from $1,000 to $1,500 the annual property tax reduction seniors can earn doing work for the town.

More recently, the night it approved spending for the school, Town Meeting also reduced from 8 percent to 4 percent the annual interest charged to seniors who opt to defer payment of property taxes.

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Garvey said officials will continue to look for “any ways to help residents in town who are struggling.”

A debt exclusion is a ballot-approved measure that increases a city or town’s property tax cap to fund debt on a specified project. Unlike an override, which is a permanent tax increase, a debt exclusion expires once the borrowing has been repaid.

Belmont’s exclusion will add $674 to the average single-family tax bill in 2020, increasing to $1,390 in 2021 and then $1,810 in 2025, remaining at that level until the nearly 30-year bond expires in 2048.

The town of Needham will spend $70 million to construct a new combined police and fire headquarters (above) to replace the existing one in Needham Center, and a new fire station to replace the existing one in Needham Heights.
The town of Needham will spend $70 million to construct a new combined police and fire headquarters (above) to replace the existing one in Needham Center, and a new fire station to replace the existing one in Needham Heights.(Town of Needham)

In Needham, where a debt exclusion for a $70 million public safety building project will add on average $388 to the tax bill of an average single-family homefor 30 years,selectmen are studying the idea of adopting a senior tax relief measure, said Board of Selectman chairman Dan Matthews.

Matthews said the cost would be effectively covered by shifting the tax burden onto other residents. Several communities have adopted the program through special acts, he said, and pending legislation would allow it as a local option statewide.

“We want the public to know that the burden on low-income seniors is something we take seriously and we are trying to provide for that,” he said.

The average tax bill in Needham for a single-family home in fiscal 2018 was $10,749.

A rendering of the new fire station planned in Needham Heights.
A rendering of the new fire station planned in Needham Heights. (Town of Needham)

Under state law, a number of property tax exemptions are available in all communities to seniors, veterans, the blind, and others, and municipalities can opt to expand tax relief or eligibility limits.

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For example residents 70 and over who meet ownership, asset, and income requirements can receive an annual $500 tax exemption, or a $175 exemption if they don’t qualify. Both can be increased by local option.

The tax deferral program allows eligible seniors to defer part or all of their property taxes, which must be repaid with interest when they die or sell the house. By local option, municipalities can lower the interest rate and increase the $20,000 income cap.

Many communities also offer a senior tax work-off program, and some maintain a senior tax relief fund. Meanwhile, under the state’s circuit breaker law, seniors may be eligible for a refundable state tax credit based on what they pay in property taxes.

But some local officials concede more needs to be done.

“We have senior homeowners with properties valued at $600,000 to $700,000,” Matthews said of Needham. “If they have a property tax bill every year that is roughly 1 percent of that equity, that is a pretty tough nut to crack and existing exemptions don’t close that gap for some people.”

One of the tax relief tools — tax deferment — has not proven popular. Belmont has just 12 seniors participating, Needham, eight, Wareham, four, and Merrimac, none. Statewide, there were 877 last year.

“They probably want to leave their property free and clear to their children and don’t want a lien on it,” said Wareham finance director/treasurer/collector John Foster, speculating on why more seniors do not participate.

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Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said there are ample tools to ease the tax burden for seniors. Rather than expanding them, he said increasing local aid is a better way to help seniors and municipalities.

“The higher the local aid goes, the lower the reliance on the property tax,” he said.

But for now, local officials hope more immediate remedies could help.

The town of Merrimac will spend $6.5 million to construct a new police station on West Main Street to replace the existing station on East Main Street.
The town of Merrimac will spend $6.5 million to construct a new police station on West Main Street to replace the existing station on East Main Street.(The Carell Group Inc.)

Merrimac Council on Aging director Laura Dillingham-Mailman said while many seniors voted for the town’s $6.5 million police station — which will add $200 to the average tax bill for 25 years — they worry taxes will climb still higher if a new regional school project goes forward.

She said town officials could ease that fear by better informing seniors about their tax relief options.

The average tax bill in Merrimac for a single-family home in fiscal 2018 was $5,871, according to the state Department of Revenue.

Alan Slavin, chairman of the Wareham Board of Selectmen, worries that seniors face financial pressures not only from taxes but from transportation, housing, and medical costs.

The debt exclusion will pay for Wareham’s share of a $90 million new elementary school, adding $212 to the average single-family tax bill for 20 years. On Dec. 12, the Massachusetts School Building Authority approved funding up to $50.8 million of the project cost.

The average tax bill in Wareham for a single-family home in fiscal 2018 was $2,912, although that figure does not include a separate tax from the town’s two fire districts.

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With a tight budget, Wareham has no easy options to expand tax relief, but Slavin said selectmen in the coming months will see what’s possible.

“We have a moral and ethical responsibility to our seniors as well as our children, so we have to do something,” he said.

The town of Wareham plans to build a $90 million K-4 school to replace the Minot Forest and John W. Decas elementary schools.
The town of Wareham plans to build a $90 million K-4 school to replace the Minot Forest and John W. Decas elementary schools.(Mount Vernon Group Architects)

John Laidler can be reached at laidler@globe.com.