Under-65 Tax Credit Exemption Gets Selectmen's Support

By: William F. Galvin

Topics: Municipal Finance

Harwich news.

HARWICH — The town has generous tax exemption programs for residents over 65 years of age, veterans, and people who are sight-impaired, but there is little in the way of programs to help younger families and residents who are facing financial hardship.

Board of Assessors Chairman Richard Waystack raised the issue of establishing a hardship exemption tax credit for people under 65 years of age during a presentation to selectmen a month ago, when selectmen were asked to decide the tax classification to be used in the community for this year. Selectmen voted to adopt a factor of one, taxing everyone at the same rate.

But Waystack pointed out with property values increasing and the tax rate continuing to rise, it is making it harder for younger families and residents to live in this community. He said the board of assessors has discussed seeking town meeting approval and special legislation to allow for such a tax credit for people under 65 years of age.

There are no such provisions in the commonwealth. Waystack said the state Department of Revenue does have a temporary tax deferral hardship provision in place, but, he added, its not the best answer for Harwich residents.

That provision allows taxpayers to temporarily defer up to 100 percent of their property taxes, regardless of age, based on financial hardship and the lack of resources to pay the taxes. The local assessors rule on such an exemption.

Waystack said the provision allows for a deferral for three years, however, the taxes must be paid back over a five-year period and includes an 8 percent interest rate as well. There are also strict qualifications for the exemption, such as being domiciled in the commonwealth for the preceding 10 years.

“I’m not sure it meets the needs for our community,” Waystack said. “What we’re looking for is a tax credit, not a deferral.”

When it comes to taxes on affordable housing units like Habitat for Humanity projects and units in places like Gomes Way, provisions are in place that set assessments at 50 percent of market value, he said.

“By keeping them in their homes paying full taxes with a $500, $750 or $1,000 tax credit, it’s a better value for the town,” Waystack said.

He said the board of assessors is seeking the selectmen’s blessing to move forward with support for town meeting article and in filing special legislation to establish a hardship exemption tax credit. Waystack said he has been contacted by two other chairmen of assessors in other Cape communities, who wanted details.

“They are very interested in what we are doing,” Waystack added.

“There are too many people in our community who are struggling to make it,” he said. “Based on spending, we’re pricing out young people who can no longer live here.”

The assessing staff has been on the telephone with an attorney from the state revenue department to see what steps are necessary to move forward with such a provision. Waystack said he is proud the assessors are being proactive in addressing the needs of residents under 65 years of age.

The qualifications for the exemption would be substantial and state officials would help develop them, Waystack said. Applicants would be required to provide tax records, income statements, retirement accounts, cash in the bank and any other financial resources stashed away.

“I support this 100 percent, the way the tax rate is going,” Selectman Michael MacAskill said.

Resident Sandy McLardy wanted to know if those residents in affordable housing, receiving the 50 percent reduction based on market value could utilize one or the other exemptions. He expressed concern that people might try to incentivize these hardships. McLardy said he agreed the town should try to help these people, but he was concerned people might change work habits to qualify for such relief.

Waystack said there would not be any double-dipping. Residents in affordable housing have a deed rider that does not allow them to take advantage of the equity in property value increases, he said. He also pointed out that people who have just moved into the community would not qualify for such exemption, citing the 10-year domicile provision in state regulations. Waystack said local criteria might require 10, 15 or 20 years of domicile.

Board of Selectmen Chairman Larry Ballantine asked whether people who were having trouble funding municipal sewer connections might qualify. Waystack said that could be one possibility.

“We’ve got a number of instances where people are hurting,” Waystack said.

The board chairman said the assessors were not looking for an immediate vote from selectmen. He said they would come back with more formal criteria with state input, and they would also speak to the legislative delegation about support.

“Judging from the body language, we’re in favor of moving forward,” Ballantine said.