The Oak Bluffs select board chose to increase its residential exemption at a tax classification hearing Thursday afternoon.
Last year, Oak Bluffs joined a small handful of municipalities throughout the commonwealth offering such exemptions. On Thursday, the board voted to adopt an 8 percent residential exemption ($90,838, based on the average residential value of $1,135,480) — an increase compared with last year’s 4 percent, or $34,036, exemption for qualified properties.
The residential exemption works by excluding a part of a property’s value from taxation by the town, which reduces residents’ annual tax bill. The residential exemption can be up to 35 percent of the average value of all residential class properties in Massachusetts.
The median single-family home value has increased over 30 percent in the past year, Oak Bluffs principal assessor Kristina West told the board, to $1,005,100; the estimated single tax rate would be $5.28 per $1,000 valuation for fiscal year 2023. This follows a trend in rate decline, from FY22 and FY21, which were $6.75 and $7.37, respectively.
Estimated value of all taxable property for FY23 is $5.5 billion, West said, compared with last year’s $4.2 billion.
The town chose to go by the recommendation made by the board of assessors, relayed by West, to neither shift the tax burden to commercial properties nor to offer small commercial properties tax exemptions.
“The initial intent was to go and do this with a very small amount, and work towards making sure everybody knew about it, and had options,” select board member Jason Balboni said. “I’d feel comfortable anywhere between 8 and 10 percent for the residential exemption.”
Select board member Emma Green-Beach agreed. She said “working up in small increments is just a good idea,” and it would allow for residents to become used to the tax change and aware of their options. “Hopefully, another couple percentages will entice more residents to sign on,” she said.
Town administrator Deborah Potter explained that the town opted to “start out really low last year,” as it was the first year offering any residential exemption. “We really wanted to make sure we had the process down,” she said, noting that within the past year, that process has been “implemented without an issue.”
Regarding thinking long-term, Potter said the select board may want to eventually discuss the goal for that residential tax exemption.