Lesser Known Massachusetts Residential Tax Credits

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Real Estate

While Energy rebates are well known and tax credits for Solar are also well known, the tax credits for Lead Paint Removal and for Septic Repair or Replacement are not as well known.

Lead Paint Removal - Bottom line, lead paint is dangerous, especially to children.   Much of our housing stock was built prior to 1978 when lead paint was banned.  You can get a tax credit if you own residential property in Massachusetts and paid for de-leading (removing or covering lead paint).  Nonresidents and part-year residents only qualify for this credit if the property is residential and located in Massachusetts. It does not need to be a principal residence in Massachusetts.  That is good news for those with second homes or investment properties.  There are several steps you need to adhere to with regard to properly identifying lead paint, testing, and removal.  It is a regulated process.  The tax credit can be as much as $1,500. If the credit is greater than the tax due, you can carry the excess credit forward for up to 7 tax years. Search on the State website site for Lead Paint Tax Credit.  A house that is de-leaded or certified treated is worth more. Especially, investment properties.

Repair or Replacement of a Septic System or Cesspool - For this tax credit, you must own the residential property and it must be your primary residence.  You're allowed a tax credit for expenses to repair or replace a “failed” cesspool or septic system to comply with state requirements or to connect to a municipal sewer system.  Part-year residents qualify for the full credit if the property is an owner-occupied principal residence in Massachusetts.  As with any tax credit and dealing with the State, there are rules and steps you need to take.  The good news?  The credit is 40% of the cost (not to exceed $15,000) and the total amount of the credit cannot exceed $6,000.  You can claim the credit for the year the repair or replacement work is completed.  If the credit is greater than the tax you owe, you can carry forward the excess credit for up to the next 5 tax years.  For Sellers thinking to sell a few years out and know that they need to replace the Cesspool or Septic System you might want to think ahead and take advantage of this tax credit. Search on the State website site for Septic Tax Credit.

Doug McNeilly is a REALTOR® with Coldwell Banker Realty in Wayland, Massachusetts.  He specializes in Wayland, Sudbury, Natick, Framingham and the Greater Boston Metro West Area.  He can be reached at doug.mcneilly@nemoves.com or www.dougmcneillyhomes.com