May 23—AMESBURY — Local low-income seniors may qualify for two new tools to help them save money now that the City Council has approved a pair of tax measures
The City Council approved a measure establishing a higher rate for the city's senior tax exemption program, as well as one to reduce the annual interest charged to residents utilizing the senior property tax deferral program during its May 12 meeting.
At-Large City Councilor Steve Stanganelli co-sponsored the two measures along with District 2 Councilor Anthony Rinaldi and District 6 Councilor Michael Hogg.
According to Stanganelli, homeowners who qualify for the state's Senior Circuit Breaker Tax Credit could also be qualified for the city's senior tax exemption program.
"I don't think you'll find hundreds of people in the city who qualify for this but I think you will find a few," Stanganelli said. "It will definitely help those few who are in need."
Stanganelli said the average single-family homeowner with a home assessed at $420,000 should see an average tax bill of $7,682 for Fiscal 2021. Under the city's senior tax exemption program, that tax bill would be reduced by $1,446 for eligible seniors.
"That is essentially close to a 20% reduction in the senior citizen's tax bill," Stanganelli said. "Plenty of other communities have also done the same thing. When someone applies for the exemption, they have to show they are eligible by showing their Massachusetts Senior Circuit Breaker Tax Credit schedule and, whatever that dollar amount is, they will get a tax exemption close to 1.5 times that credit. That credit ranges at the state level from about $1 to $1,150."
Seniors must have been living in the city (but not at the same address) for the past 10 years to qualify for the senior tax exemption program.
"This doesn't mean everyone's going to get that 1.5 times, that $1,150," Stanganelli said. "It means that, if somebody goes to the Board of Assessors with an application, saying that they have a $1,000 credit, they would have 1.5 times that as an exemption offered on their local property taxes. But if someone comes in with $1 as a circuit breaker exemption, they will basically get nothing. It is all based on income."
Stanganelli added that 376 Amesbury residents qualified for the state's Senior Circuit Breaker Tax Credit program and received an average tax rebate of roughly $960 from the state in 2018.
"If they are getting the maximum Mass. Circuit Breaker credit, they are getting it because their income is extremely low," Stanganelli said. "Their adjusted gross income is somewhere in about the $5,000 range. That means that they are probably on Social Security and maybe working part time at Market Basket for about $5,000 a year. On the other hand, someone who has a pension and Social Security and they have some other employment or other earnings coming in, they might be on the other side of the scale and are earning well above $60,000 or $90,000 a year. They are not very likely going to get anything more than a couple of bucks from the city."
According to Stanganelli, under the senior property tax deferral program, the average lower-income city senior could save some coin thanks to an interest rate reduction in money they may owe in city property taxes.
"If you are having difficulty paying your property taxes, you could be paying approximately 15% right now," Stanganelli said. "You would have that accruing at an annual rate. But we lowered it in this case I believe down to 4%."
The income level used when a person applies for the senior property tax deferral program has also been increased, up from the city's previous $40,000.
"By adopting this program, we increase the level to an income level of $61,000," Stanganelli said. "But that will automatically change, based on whatever the Massachusetts Department of Revenue changes it to when they update the Mass. Senior Circuit Breaker Tax Credit, year over year. That also applies whether you are single, married and filing jointly or head of household. We think this will help a few more people. We also asked the assessor to check on it and he said there are about two people, annually, who are generally using the existing tax referral program at an 8% interest rate. We think that they might be a half dozen people interested now that we have lowered the interest rate."
Staff writer Jim Sullivan covers Amesbury and Salisbury for The Daily News. He can be reached via email at email@example.com or by phone at 978-961-3145. Follow him on Twitter @ndnsully.