I just bought a property in the City of Boston and I am hearing something about a residential exemption. What is that all about and how I go about getting it?

The City of Boston since 1983 has had a provision that allows someone who occupies a property as their principal residence to obtain a residential exemption. What that does is exempt from your tax bill a certain portion of the assessment which has the effect of reducing out your tax bill. For example, if the residential exemption were $50,000 with a home assessed with a value of $200,000 the property would be taxed based upon just  $150,000 of value. This exemption value, when multiplied by the current residential tax rate, represents the dollar savings of the residential exemption. 

In fiscal year 2009 the residential tax rate was $10.63 per thousand of assessed value so, in this example, the exemption would be in the amount of $531.50. In order to qualify for it you must own the property on January 1 of the year prior to the next fiscal year. The fiscal year runs from July 1 of each year to June 30 of the following year. So, in order to qualify for a residential exemption for fiscal year 2010, which began on July 1, 2009, you must have owned the property by January 1 2009. The residential exemption is 30% of the average value of all residential property in the City, so it can be a significant savings. The residential exemption for fiscal year 2010 will be applied in the third quarter bill which will be issued on January 1, 2010. In order to obtain the exemption the property must have been your principal residence and the address from which your Massachusetts income tax return was filed. To verify eligibility you are required to provide your Social Security Number and is used solely by the City for the purposes of confirming your address with the Department Revenue of the Commonwealth of Massachusetts. 

The exemption only applies to one parcel of real estate. So, if you bought the property for commercial purposes or if you bought it as an investment for rental purposes or if you bought it to have your college aged child or grandchild live in it while they are attending school in Boston you will not be able to get the exemption. The residential exemption will appear on the fiscal year 2010 third-quarter tax bill. If it does not appear on the bill and you believe you're entitled to exemption you may file an application for the exemption between January 1, 2010 and March 31, 2010. 

Application forms can be obtained from the Assessing Department Room 301 in City Hall or at the Taxpayer Referral & Assistance Center, Room M 5 at City Hall. The application will also be online between January 1, 2010 and March 31, 2010. The completed application must be returned to the Assessing Department, Room 301 City Hall Boston, Mass. 02201. Each year the amount of the exemption is based upon the recommendation of the Mayor, with the approval of the Boston City Council.

If you have questions about this or any other real estate matter, please contact Tom Bennett at (617) 531-6574 or tvb@barronstad.com.