Explaining Lexington’s Enhanced Senior Property Tax Deferrals

By a unanimous vote, Lexington’s annual Town Meeting last Wednesday approved . 

It was the fourth such increase since a 2008 home rule petition allowed Lexington to raise its local limit from the state’s established maximum. Town Meeting increased the limit from $40,000 to $50,000 in 2009, and to $51,000 and $60,000 before climbing to $65,000 this year.

But what do the numbers mean?

Basically, Lexington residents aged 65 and older with household incomes of $65,000 or less can defer paying all or part of their property tax or water/sewer bill—letting the value of their home pay the deferred charges at the time of its sale—and in the meantime use the money however the homeowner sees fit.

From the Town Manager’s Office press release explaining the enhanced deferrals:

Deferrals are a very safe way to free up income. By law, a senior can never be forced to sell or move due to taxes deferred under this program. Seniors who are considering commercially available reverse mortgages will find that deferrals offer terms that are much more favorable to the senior.

Each year’s deferral is like an individual loan that doesn’t have to be paid back in the homeowner’s lifetime unless home ownership is transferred or he or she chooses to pay it off. The low interest rate is simple interest (not compounded). The rate on each year’s deferral is locked in and can never go up in the homeowner’s lifetime. The interest rate is based on the U.S. Treasury 1-year constant maturity rate established in March of the preceding fiscal year

For detailed information on the Property Tax Deferral Program and on other state and local tax programs, visit the Assessor’s page on the Town of Lexington website www.lexingtonma.gov and click on the link for the Tax Relief for Seniors brochure or pick up a copy at the Town Offices or Senior Center.