Cyrus Tehrani

Buying can be more affordable than renting

Cyrus Tehrani
Buying can be more affordable than renting

Understanding the Boston Residential Exemption.

If you plan on living in the home you buy and it is located in Boston, you should file for the Boston Residential Exemption. This exemption incentivizes homebuyers to live in the home they purchase by discounting their property taxes by a significant percentage (up $2,400 in 2016).

When looking on Redfin or other sites there is usually a property tax estimate provided by the seller. It is important to inquire whether the seller has filed for the exemption for the current year or not. If they haven’t, then you’ll temporarily have to pay full property taxes until you are eligible. You become eligible by living in your place at the start of the calendar year, and filing by the start of April during that year for Boston’s fiscal year that starts on July 1st.

For example, if you buy a home in May, 2017 without an exemption filed by the seller, you’ll have to wait until fiscal year 2019, starting July 1st 2018, before you’ll see the discount applied to your property taxes.

If you are buying a new construction unit, it will not have the residential exemption applied. You will have to wait for eligibility and file for the exemption at the appropriate time.