Senior Property Tax Deferral: Good, Bad, and Awful; deadline April 1

This advocacy for seniors on the city’s senior property tax deferral is by Rick Fentin, CFP®, Ed.M. Cambridge Financial Associates, Arlington. Questions? Email him at This email address is protected from spam. You need JavaScript enabled to view it..

Do you ever get up in the morning, open the fridge, and see that three-day-old bowl of oatmeal you thought you could eat?

It has apples, pecans, prunes and steel cut oats – so healthy – but it looks, you know what: awful! Well, thinking about deferring property tax for seniors is kind of like that oatmeal. It might be good for you, and it might be good for your budget, but do you really want to dig in?

Yes, you should try it: add milk and fresh strawberries, heat it up in the microwave and enjoy a delicious extra cash flow in your life.

The Elderly Property Tax Deferral is one of the least advertised, least used and, in my opinion, potentially most useful programs for older people in the Commonwealth.

Here are the general rules

The program is available in most cities and towns. There may be specific differences from city to city. Find out. Below are the “general” rules for the wonderful city of Arlington.

If you are willing to admit that you are 65 or older, have a total income in 2021 (not only taxable) of $92,000 or less, have lived in Massachusetts for the past 10 years, and have owned and occupied a home in Massachusetts for five years, you may be eligible to defer (not eliminate) paying your property taxes until you die or until you sell your home.

You can pay an extremely low interest rate on the tax deferral, well below typical rates for refinancing your home or for a home equity loan and well below the rates charged for reverse mortgages (sorry, Tom Selleck ). Also, there are no fees.

There are potential downsides to consider, which I’ll mention, but the benefits may be worth at least tasting the oatmeal.

Enjoy $10,000 now?

Currently, if you qualify annually, you can defer all assessed property taxes on your home. Imagine your home potentially going up in value every year and you had an extra $5,000, $10,000, or $15,000 a year to enjoy now rather than after you die. These funds could make a big difference in helping you live longer in the place you love.

As usual, there are some perceived and real potential downsides to consider.

As a senior, you may qualify for the Massachusetts Main Circuit Breaker Tax Credit. Depending on the amount of taxes you are deferring, this may affect this credit.

Additionally, if you have a mortgage or high medical bills and plan to itemize deductions on your tax return, the property tax deferral may negatively affect your breakdown. Talk to your tax advisor first.

On a more emotional note, some people absolutely insist on passing their house to their children without any debt. It’s fine if you have enough cash to live the life you want. But many older people don’t.

An unsustainable possibility

According to the recent American Community Survey, Arlington seniors age 65 and older had a median income 50% lower than the median income of the 25-64 age group. But all pay the same rate for property taxes. This is unbearable for many older people.

When it comes to debt, I don’t think most kids would mind inheriting a house that has appreciated significantly in value, but has a small amount of property taxes owed when it’s sold. Talk to your kids or, on second thought, maybe it’s best to whip up some fresh oatmeal while you consider property tax deferral in a new light.

Please skip the brown sugar and file your application for fiscal year 2022 by April 1. Speak to the assessors office.

This view was posted on Tuesday, March 8, 2022.

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