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On November 16, 1999, the town of Shrewsbury accepted section 2D
of Chapter 59 of Mass General Laws. This new section (2D) allows
communities to collect a pro rata tax on properties that have increased
in value by more than 50% due to new construction or improvements.
This tax has been termed a "supplemental tax" by the Department
of Revenue. We began implementing the process for fiscal year 2001,
beginning July 1, 2000.
As an example: if a building does not exist, or is under construction,
on the assessment date of July 1 the value for the actual tax bill
will be computed based on the condition at that time. When the building
is completed, if the new value has increased by more than 50% of
the value on July 1, a tax bill will be generated based on the difference
in value pro-rated from the day the occupancy permit is signed to
the end of the fiscal year.
It should be noted that, in the great majority of instances, the
amount of this tax would not be computed or committed for collection
prior to any closings that would occur for the transfer of property.
The amount will not be available for disclosure on any municipal
liens and, in some instances, will not be billed for up to six months
or more after the closing. The bill will be issued to the person
who is listed as the owner of record as of January 1st of the taxing
year, and not to the new owner.
This statute was presented to the voters in a special election
and accepted by the voters of Shrewsbury. It can only be repealed
in the same manner after it has been implemented for at least three
years.
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