What Is A Personal Exemption?

Dept. of Revenue Q&A July 2013

City and Town Editorial Board

This month's Ask DLS features frequently asked questions about eligibility requirements common to all personal exemptions for local property taxpayers. We hope the answers will provide timely and helpful information. Please let us know if you have other areas of interest or send a question to [email protected]. We'd like to hear from you.

What is a personal exemption?

An exemption is a privilege established by the Legislature that releases or discharges a taxpayer from the obligation to pay all or a portion of a tax. Property tax exemptions are found in various clauses of G.L. c. 59, s. 5. Generally, personal exemptions refer to those property tax exemptions available under state law to taxpayers based on their personal circumstances. They include, for example, exemptions available to persons who are legally blind, veterans, surviving spouses, minors with a deceased parent or seniors. Some eligibility requirements are common to all personal exemptions, for example, taxpayers must own and occupy the property as their domicile to qualify. Other requirements apply to particular exemptions. Some exemptions or qualifications apply only in communities that adopt them.

More detailed information about personal exemption eligibility requirements is found in Chapter 7 of Assessment Administration: Law, Procedures and Valuation, the course handbook issued by the Division of Local Services for use in its training program for assessors.

What is the qualification date for a personal exemption?

Exempt status is determined as of July 1, which is the first day of the fiscal year. To qualify for an exemption from the taxes assessed for that fiscal year, the taxpayer must meet all eligibility criteria as of that date. G.L. c. 59, s. 5.

Who is an owner for personal exemption purposes?

All personal exemptions require the taxpayer to own the property. The taxpayer can be the sole owner or own the property with others. If there are multiple owners, some exemptions establish a minimum value that the applicant's ownership interest must meet to qualify, which is easily satisfied. Some exemptions also require the taxpayer to have owned the property, or other property in Massachusetts, for a period of time. See Table 2 in Chapter 7 of Assessment Administration: Law, Procedures and Valuation for these duration ownership requirements.

A.) Is a life tenant an owner?

Yes. A life tenant is the owner of the property during his or her lifetime. An example of a legal life estate is where parents convey their domicile to their children but reserve the right to live there for the remainder of their lives. The parents are the life tenants. During their lives, they have possession, use and enjoyment of the property, are assessed the property taxes and have an obligation to pay them. Therefore, they may receive personal exemptions if they are otherwise eligible. Breare v. Board of Assessors of Peabody, 350 Mass. 391 (1966). The children are the remaindermen and become the owners and take possession of the property after both parents have died.

B.) Is a person whose domicile is part of the assets of a trust an owner?

Sometimes. The person must hold both record legal title by being a trustee or co-trustee and a sufficient beneficial interest in the domicile through the trust to be an owner for exemption purposes. Kirby v. Board of Assessors of Medford, 350 Mass. 386 (1966). A person who is not a trustee does not have legal title and does not qualify for a personal exemption.

A trustee or co-trustee has the necessary beneficial interest if he or she (1) is a named beneficiary in a recorded certificate of trust, declaration of trust or trust schedule of beneficiaries; (2) has an express right to occupy the property under the trust or is in fact occupying it as his or her domicile; or (3) has rights under the trust that indicate he or she can occupy the property and no one else has a beneficial interest that is exclusive or inconsistent with that occupancy, e.g., to direct the trustee to turn over the title or use of the property, to receive proceeds from the sale or rental of the property or to use, apply or spend any trust assets during his or her lifetime.

What residence is a person's domicile?

A person may have more than one residence, but only one domicile. Once a person establishes a domicile, it continues until the person abandons it and acquires a new one elsewhere.

If a person has more than one residence, the person's domicile is his or her principal and legal home. It is where the person's family, social, civic and economic life is centered and where the person plans to return after being away. Indicators of domicile include where the person votes, registers a car, spends most of his or her time, replies to the census, files tax returns and has ties to the community, such as where the person's spouse and children live and church, club, social organization and banking institutions are maintained. No one indicator is decisive. The assessors must look at the totality of the facts and circumstances.

Some exemptions also require the taxpayer to have been domiciled in the property, or other property in Massachusetts, for a period of time. See Table 2 in Chapter 7 of Assessment Administration: Law, Procedures and Valuation for these durational domicile requirements.

How does a taxpayer obtain a personal exemption?

The taxpayer must file an application for exemption with the board of assessors of the community where the property is located for each year an exemption is claimed. Applications for the National Guard or military reservist exemption under local option G.L. c. 59, s. 5, Clause 56 and senior exemptions under local option G.L. c. 59, s. 5, Clauses 41C1/2 and 57 are due the same date as abatement applications for the year (due date for the first actual tax payment for the year). The application deadline for all other personal exemptions is December 15, or 3 months after actual bills are mailed for the fiscal year, whichever is later. Applications must be received by the assessors' office on or before the deadline, or mailed to the assessors' correct address by the deadline, as shown by a United States Postal Service postmark. G.L. c. 59, s. 59. Filing on time is required. The assessors cannot waive the filing deadline.

Are personal exemption applications public records?

No. Under G.L. c. 59, s. 60, applications for personal exemption cannot be disclosed to the general public. Access to applications is strictly limited to the assessors and their staff, the Department of Revenue, other state and local officials in the performance of official duties, and designated private auditors. The taxpayer (or authorized representative) may also have access to or a copy of the applications he or she submitted. The application includes any supporting documentation submitted to substantiate the claim.

However, the exemption record book, which identifies taxpayers granted exemptions and the exemption amounts, is a public record and is open to mandatory disclosure under the public records law.