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What is the Community Preservation Act? M.G.L. Chapter 44B The Community Preservation Act (CPA) was adopted by Salem voters on November 6, 2012. It established a pool of funds for the purpose of undertaking projects involved with open space, historic preservation, outdoor recreation or community housing. It is financed by surcharge revenues, along with matching funds from the Commonwealth of Massachusetts. This Taxpayer Information Guide will help property owners understand how the surcharge is calculated and the requirements for applying for an exemption. Rev. 05/2025 CITY OF SALEM ASSESSORS OFFICE Community Preservation Act Taxpayer Information Guide Fiscal Year 2026 July 1, 2025 - June 30, 2026 ---PAGE BREAK--- What are surcharge revenues? The surcharge is paid by residential and commercial property owners (not industrial). The first $100,000 of taxable value is exempt. On the remaining value, the City levies a surcharge of 1% (of the assessed property tax), which is included in real estate tax bills. Assessed values under $100K are excluded. How is the surcharge calculated? The 1% surcharge is calculated as follows (using an assessed valuation of $300,000 as an example and based on the City of Salem’s FY25 tax rate): Example A. Assessment $300,000.00 B. FY 2025 Res Tax Rate $11.34 C. FY 2025 TAX $3,402.00 D. CPA Residential Exemption $100,000.00 E. CPA Taxable Value $200,000.00 F. CPA Tax Basis $2,268.00 G. CPA Surcharge $22.68 H. TOTAL ANNUAL BILL $2,290.68 The annual tax rate ($11.34-Residential, $22.62-Commercial) per $1000 of the property assessment (A ÷ $1000 x rate = The CPA exempts $100,000 (A - D = The tax rate is applied to the CPA Taxable Value (E ÷ $1000 x rate = The surcharge is 1% of the CPA Tax Basis (F x 1% = C + G = H (the total annual bill). The surcharge is divided equally over the quarterly tax bills. Are there exemptions to the surcharge? • Any residential property entitled to abatement or statutory exemption is automatically entitled to a proportional CPA exemption. • Certain households may be eligible for a full CPA exemption. What are the requirements for full CPA exemption? To qualify for an exemption for fiscal year 2026, residential property owners must meet: • Age and residence requirements as of January 1, 2025. • Income requirements based on 2024 income. There are two categories of income limits1: Moderate Income: Over 60 years of age with annual income not exceeding the limit for your size household: Household Size Annual Income Limit 1 $112,630 2 $128,720 3 $144,810 4 $160,900 5 $173,772 6 $186,644 7 $199,516 8 $212,388 1 Calculation of Income Limits based on HUD AWMI (Housing Urban Development - Area Wide Median Income) – Source: org/income-limits Low Income: Annual income not exceeding the limit for your size household: Household Size Annual Income Limit 1 $90,104 2 $102,976 3 $115,848 4 $128,720 5 $139,018 6 $149,315 7 $159,613 8 $169,910 How do I apply for a full exemption? An application for exemption from the CPA surcharge (based on income) must be filed annually with the Assessors Office by April 1st, 2026. Please include a copy of your Income Tax returns from 2024 and a copy of your license or birth certificate. Note: The filing of the application does not stay the collection of the tax. If you believe you are eligible for a full exemption, contact: Assessors Office 93 Washington Street – Room 6 Salem, MA 01970 (978) 619-5608 [EMAIL REDACTED] Hours of Operation: Monday-Wednesday: 8am - 4pm Thursday: 8am – 7pm Friday: 8am – 12pm For information about the City of Salem’s Community Preservation Act or the established Community Preservation Committee, visit www.salem.com/Pages/SalemMA_CPC/index