Unlike an exemption which discharges a tax obligation, Clause 41A permits an elderly taxpayer to postpone payment of property taxes. A taxpayer who already receives a personal exemption is not precluded from seeking to defer the balance. If you qualify, you must enter into a written tax deferral and recovery agreement with the Manchester Assessors who put a lien on the property to be recorded at the Registry of Deeds. Joint owners and mortgagees must give prior written approval.
The agreement requires the deferred taxes along with 8% annual interest be repaid in full (1) when the property is sold or transferred, (2) upon your death, or (3) upon the death of your surviving spouse (if he or she qualifies for a deferral and enters into a new tax deferral agreement). The interest rate goes up to 16% upon the date of death or transfer; 6 months thereafter, the treasurer may seek to foreclose the lien on the property if the deferred amount remains unpaid. Once the deferred taxes are repaid the lien is released. You may file an application if you are:
65 years old or older
Owned and occupied the property as your domicile
Owned and occupied any property in Massachusetts as your domicile for at least 5 years
Lived in Massachusetts for at least the prior 10 years
Have an annual income not more than $40,000 (proof is required)