Hello neighbors,

It was surprising to me how many of my seller clients this year were not aware of Boston's Residential Exemption program. Basically, if you are a home owner residing within city limits, you get a pretty healthy discount on your taxes. More about the Residential Exemption from the City of Boston website:

Since 1983, the city of Boston had elected to apply a residential exemption to residential property that serves as a principal residence of its owner.

Taxpayers who own and occupy their home can save on their tax bill by having a portion of their tax bill exempted from taxation. To qualify for the residential exemption, homeowners must own and occupy their home on January 1.

The value of the exemption is subtracted from the total full valuation. The fiscal year residential exemption is 30% of the average value of all residential property in the City.

The Fiscal Year 2010 residential exemption subtracts $125.090 from the property’s assessed value, saving qualified homeowners $1,486.07 on their tax bill.
Who can apply for FY 2010?

A taxpayer who owns and occupies residential property as their principal residence as of January 1, 2009 may apply for the residential exemption.

For the purpose of this exemption, the principal residence is the address from which your Massachusetts income tax return is filed. To verify eligibility, your Social Security Number is required for identification purposes. The information will be kept confidential and be used solely to confirm a 2008 personal income tax filing from your address with the Commonwealth of MA Department of Revenue.

An individual owner may qualify for a residential exemption on ONE parcel only.

A principal residence is one in which the taxpayer lives and which is used as a permanent home and legal residence for income tax purposes. An individual owner may qualify for a residential exemption on only one parcel.
When must an application be filed?

The residential exemption appears on the FY 2010 3rd Quarter tax bill. Owners who do not receive the exemption on this bill, but believe they may be entitled to a residential exemption, must file an application for a residential exemption with the Assessing Department, within three (3) months of the mailing date of the FY 2010 3rd Quarter tax bill.

The filing deadline is March 31, 2010.
How do I apply?

Application forms will be available at the Assessing Department, Room 301, City Hall or at the Taxpayer Referral & Assistance Center (TRAC), Rm M5, City Hall. The TRAC (617) 635-4287 is open Monday through Friday from 9am – 5pm.

The Residential Exemption Application is available online
(January 1, 2010 – March 31, 2010 ONLY).

NOTE: Your Social Security Number is required for identification purposes and will be kept confidential. It will be used solely to confirm a 2008 personal income tax filing from this address with the Commonwealth of Massachusetts Department of Revenue.

Return the completed application to:

Assessing Department – Room 301
City Hall, Boston, MA 02201

NOTE: Applicants for residential exemption must provide their social security number on their application. This information will be kept confidential by the Assessing Department and used solely to confirm residency compliance.
May other exemptions apply?

The residential exemption is granted in addition to any other personal exemption to which a taxpayer may be entitled. However, no parcel of real estate may be assessed for less than ten percent of its fair cash value. (there is an exception for certain persons with physical infirmities and financial hardship.) How is the value of the exemption calculated?
How is the value of the exemption calculated?

For FY 2010 under Massachusetts law, the residential exemption may be as much as 30% of the average assessed value of all residential property in the city. For example, if the average value of all residential property were $150,000, the exemption could range from $0 to $45,000 (30% of the $150,000 value).

The residential exemption is a dollar amount of value that is exempt from taxation. Each year, the amount of the exemption is based on the recommendation of the Mayor, with the approval of the Boston City Council.

If, for example, the residential exemption were $45,000, a home with an assessed value of $150,000 would be taxed on just $105,000 of value. This exemption value, when multiplied by the current residential tax rate, represents the dollar savings amount of the residential exemption.
Compliance with requirements

The Assessing Department conducts periodic reviews to ensure that only those owners who actually occupy their property as their principal residence receive the exemption. Owners who do not comply with the requirements of the residential exemption – or who fail to respond to requests for documentation – will lose the exemption benefit
Residential exemption review process

The Taxpayer Referral & Assistance Center (TRAC) has three (3) months from the date on which the application was filed to determine the merits of the application.

The filing of an application does not mean that you can postpone the payment of your tax. The tax appearing on each of the quarterly tax bills must be paid in full. If an application for the residential exemption is subsequently approved, a refund will follow.
Appeal of decision

If the application is denied, the taxpayer may file an appeal to The Commonwealth of Massachusetts Appellate Tax Board (ATB) within three (3) months of the date on which the TRAC made its decision.

The ATB is located at:

100 Cambridge Street
2nd Floor, Suite 200
Boston, MA 02114
(617) 727-3100