Community Preservation Act Surcharge

On November 8, 2022, the voters of the City of Worcester approved the adoption of Question 5 - Worcester Community Preservation Act. This vote accepted Chapter 44B of the Massachusetts General Laws, Sections 3 to 7, known as the Community Preservation Act (CPA), which establishes a fund dedicated to the acquisition, creation, preservation and support of community housing, parks and recreational uses and historic buildings and resources. By the terms of this public vote, the CPA fund will be supported by a 1.5% surcharge on the annual property tax assessed on real estate in Worcester beginning in fiscal year 2024, and by annual distributions from a state trust fund created by the CPA. The specific allocation and use of these dollars for their stated purposes will be overseen by the Community Preservation Committee.

The first year of implementation of the surcharge was Fiscal Year 2024, which ran from July 1, 2023 through June 30, 2024. This full FY24 obligation was divided between two bills: the 3rd Quarter (issued December 29, 2023) and 4th Quarter (issued March 29, 2024) bills. Taxpayers saw the first CPA surcharge bill included in their property tax bill envelope received by mail in January 2024. For the current fiscal year, Fiscal Year 25, taxpayers can expect to see their CPA Surcharge bills around the same time: in the 3rd Quarter (issued December 31, 2024) and 4th Quarter (issued March 31, 2025) bills. In future fiscal years, this surcharge will be incorporated into each quarterly tax bill. For now, however, it is important that both bills (the real estate property tax bill and the Community Preservation Act surcharge) are paid in full as failure to pay the CPA results in the same interest, fees and other penalties as failure to pay property taxes. If you generally pay your local taxes through an escrow with your mortgage company, check to ensure that they have included CPA in their payment.

FY25 Example

The following formula will assist in understanding the potential impact of the CPA surcharge on your property:

(Property Assessment - $100,000)/1000 * Tax Rate * 1.5%

Residential Ex: ($430,000 - $100,000)/1000 x $13.19 x 0.015 = $65.29

Commercial Ex: ($430,000 - $100,000)/1000 x $28.61 x 0.015 = $141.62

You can estimate the surcharge using the current tax rate.

Exemptions

Under the terms of the vote, the following will be exempt from the surcharge: (1) property owned and occupied as a domicile by any person who qualifies for low-income housing or low- or moderate-income senior housing; (2) $100,000 of the value of each taxable parcel of residential property; and (3) $100,000 of the value of each taxable parcel of class three - commercial property - and class four - industrial property.

Abatement

PLEASE NOTE: The first year of implementation of the surcharge was Fiscal Year 2024, which ran from July 1, 2023 through June 30, 2024. This full FY24 obligation was divided between two bills: the 3rd Quarter (issued December 29, 2023) and 4th Quarter (issued March 29, 2024) bills. Therefore, taxpayers should have seen the first CPA surcharge bill included in their property tax bill envelope received by mail in January 2024. The two bills received for FY 2024 are for the entire Fiscal Year, so as a general guide, the total amount would be divided into quarters, not halves, in future fiscal years. However, for the current fiscal year, Fiscal Year 25, taxpayers can expect to see their CPA Surcharge bills around the same time: in the 3rd Quarter (issued December 31, 2024) and 4th Quarter (issued March 31, 2025) bills. In future fiscal years, this surcharge will be incorporated into each quarterly tax bill. For now, however, it is important that both bills (the real estate property tax bill and the Community Preservation Act surcharge) are paid in full as failure to pay the CPA results in the same interest, fees and other penalties as failure to pay property taxes.

Individuals that are seeking an exemption from the CPA Surcharge must meet the minimum eligibility requirements being:

• Applications MUST be submitted NO LATER than APRIL 1st 2025 in order to be eligible for the Fiscal Year 2025 CPA surcharge being exempted.
• Property owned and occupied as a domicile by any person who qualifies for low-income housing, or low-or moderate-income senior housing. This is verified by the income and expenses of the household (and any other co-owners) from the preceding year in order to qualify for this CPA exemption. You will be required to submit proof of your wages, salaries, other compensation, Social Security, pension/retirement benefits, interest/dividends, rental income, net profits from a business or profession, capital gains, alimony, child support, public assistance, disability compensation and any other form of income the household is receiving.
• There are also different income thresholds for those under the age of 60 as of 1/1/2023 as well as for those over the age of 60 as of this date. A birth certificate will be required to verify age for the first year the applicant is seeking this exemption.
• Residency must also have been established as of 1/1/2024.

CPA Surcharge Abatement Application