S2917 — An Act to prevent property tax bill shocks

Summary

An Act to prevent property tax bill shocks

Bill Text

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This bill adds a new section to define eligible properties for tax shock prevention credits and establishes criteria for municipalities to award these credits during periods of significant property tax levy increases.

• Chapter 59

  Section 5P. (a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise: “Eligible tax shock property”, a property that is a senior qualifying property, a MassHealth qualifying property, an unemployment qualifying property, young family qualifying property or a high need neighborhood qualifying property. “High need neighborhood qualifying property”, a residential property which, as of July 1 of the tax shock year, lies entirely or partially within a qualified census tract as defined in 26 U.S.C. 42(d)(5)(B)(ii)(I). “MassHealth qualifying property”, a property comprised of not more than 4 residential units at least 1 of which is occupied by an owner of the property and where such property’s owner’s household includes a person who was enrolled in MassHealth at any time during the tax shock year before December 31 of the tax shock year. “Owner”, an owner of property or a beneficiary of a trust that is an owner of a property. “Residential property tax levy growth percentage”, the percentage by which the residential property tax levy for a fiscal year less any portion attributable to new growth exceeds the residential property tax levy in the previous fiscal year. “Senior qualifying property”, a property comprised of not more than 4 residential units at least 1 of which is occupied by an owner of the property who: (i) will be 65 or over as of December 31 of the tax shock year; provided, however, that a municipality may, at the time of adoption, further limit this definition to a household whose income does not exceed an established percentage of the federal poverty level and (ii) whose total assets do not exceed an established limit, as determined by the city or town. “Tax shock prevention credit”, a credit awarded to the owner of an eligible tax shock property against actual tax bill in a tax shock year. “Tax shock year”, a fiscal year in which the city or town determines that the residential property tax levy growth percentage in a municipality is, or is likely to be, more than 10 per cent. “Unemployment qualifying property”, a property comprised of not more than 4 residential units at least 1 of which is occupied by an owner of the property and where such property’s owner’s household includes a person who received unemployment benefits for not less than 12 weeks during the tax shock year before December 31 of the tax shock year. “Young family qualifying property”, a property comprised of not more than 4 residential units at least 1 of which is occupied by an owner of the property and where such property’s owner’s household includes a person under the age of 6 years old; provided, however, that a municipality may, at the time of adoption, further limit this definition to a household whose income does not exceed an established percentage of the federal poverty level and whose total assets do not exceed an established limit, as determined by the city or town; and provided further, that a municipality may, at the time of adoption, expand the definition to a household that includes a person who is not more than 17 years old, as determined by the city or town. (b) In a city or town that issues preliminary tax bills and accepts the provisions of this section, for a particular tax shock year the city or town may award tax shock prevention credits for eligible tax shock properties and apply them toward actual tax bills. (c) The aggregate amount of tax shock prevention credits awarded to a taxpayer in a fiscal year shall be a percentage not exceeding 50 per cent, as established by the city or town, of the amount by which the aggregate total of tax owed on the taxpayer’s actual tax bills in the fiscal year exceeds the aggregate total of tax owed on the taxpayer’s preliminary tax bills in the fiscal year; provided, however, that in a city or town that issues 2 actual tax bills, the credit allowed on the first actual tax bill shall be two-thirds of the aggregate amount of the credits for the fiscal year and the credit allowed on the second actual tax bill shall be one-third of the aggregate amount of said credits. (d) The applicable percentage established by the city or town in subsection (c) shall be the same for all eligible properties in the applicable tax shock year. (e) Notwithstanding section 4 of chapter 4 or any other general or special law to the contrary, to be effective, acceptance by a city or town of this section shall occur before the mailing of any actual tax bills and shall include: (i) the city’s or town’s certification that such city or town has funds available to cover the cost of potential tax shock prevention credits; and (ii) proof of review and approval of the certification by the division of local services. (f) An acceptance of this section by a city or town shall not alter the property tax levy limit for such city or town.

  This introduces a new section defining criteria for tax shock prevention credits that municipalities can implement.

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