October 31 City Council Meeting
Monday’s meeting was one of the shortest meetings of this term, beginning promptly at 5:30 and ending at 6:43. Most of the discussion was about some issues at subsidized housing developments serving the elderly and the City’s purchase of the West Cambridge VFW for a West Cambridge Youth Center. The Council also passed an order that came out of the discussion regarding City revenues and the property tax.
Tax Relief for Elderly and Disabled
The Special Committee on Property Tax has discussed a variety of options to change the property tax system. At Monday’s meeting the Council requested specific changes to Massachusetts General Law, Chapter 59 which governs assessment of local taxes. The proposed changes would change the qualification for deferral of property taxes. Under Appellate Tax Board interpretation of the current law an individuals must meet all of the following criteria: over 65 years of age; permanently disabled; and have an annual income less than $40,000. The proposed change would allow an individual who meets any of these criteria to apply for deferral and reduce the age to 55 and increase the income limit to the median income level for the community. This is currently $57,000 in Cambridge.
The deferral requires payment of the back taxes with interest at time of transfer of the property from the person who meets the qualifications for deferral. The state currently mandates an 8% simple interest rate. The Council proposes changing the interest rate to between 3% and 8% simple interest determined annually by a vote of the City Council.
Why is this important to the business community? The result of these changes should be more property owners qualifying for this deferral which should result in the City collecting less tax revenue from residential taxpayers. My sense is that the change will have a minor impact on municipal revenue and should have a minor impact on the tax rate.
