Affordable Housing Tax Exemption Available

 HARWICH – The affordable housing property tax exemption approved by town meeting in May went into effect on July 1. It provides real estate tax exemptions of $1,000 to $1,500 to homeowners who rent a portion of their home to income-qualified people on a year-round basis. 

  Harwich may be the first and only community in the state that is taking advantage of the state law established in October 2023, said Director of Assessing Carlene Jones. Jones said she recently got a call from the assessing department in the town of Carver asking how the tax exemption program works in Harwich.

 Board of Assessors Chair Richard Waystack said Wellfleet and Provincetown have similar programs, but they are not the same.

The first exemption in the program was approved a couple of weeks ago, said Waystack. The vetting of applicants involves a lot of private information, such as federal and state income tax returns, bank statements, pay stubs, proof of rental payments, and a copy of the lease. The board examines the information in executive session so the information remains confidential, Waystack said.

  The program is one more way to address the affordable housing needs in the community, he said. There are a number of people in the community with large homes who are living alone, he noted; in many cases a spouse has passed away and these people could use the tax break. 

If property owners rent a room or a unit in the house to an income-qualified person on a year-round basis, they can receive a tax exemption of $1,000 for a unit up to 500 square feet and $1,500 for a unit that is more than 500 square feet. 

The Harwich exemption program is using 125 percent of the federal Housing and Urban Development income criteria because housing is so expensive in Barnstable County, Jones said. The salary cap for one person utilizing an efficiency unit is $108,588, and the rental cannot exceed $1,739 a month. There are also income and monthly cost caps for two- to six-person rentals. Utilities are included in the monthly rental fee, added Jones.

Waystack said the average rental for a one bedroom unit in the Harwich and Dennis area is $2,400 a month.

Jones related a story of a senior citizen in town whose husband passed away and she was alone in a large home. She decided to rent rooms to school teachers coming into the community. This would be a great program from someone like her, Jones said.

The town has a cap of 30 exemptions a year so as to reduce the impact on the department’s overlay account which covers abatements and exemptions. 

The town has 11 property tax exemption programs that help residents with hardships as well as veterans and senior citizens. Last year the town issued 279 exemptions totaling $258,000. Waystack said he doubts the affordable housing exemption will receive 30 requests this year, but the assessing department wants to get the word out about the new program. 

Jones said other exemptions and programs can be packaged with the new program to provide additional financial assistance. The senior citizen exemptions are examples, according to Jones. The Housing Assistance Corporation also has credits for establishing accessory dwelling units that also could be packaged with this program, she said.

The period for filing applications is July 1 through Feb. 1. Applications have to be filed on an annual basis. 

Waystack praised the performance of the assessing department staff for putting these programs together and vetting the applications. He emphasized that anyone who has questions about these programs should call the assessing department.

“We’re trying to be proactive, not reactive,” said Waystack.