Year-round Provincetown residents get property tax break

Provincetown has become the 14th community in Massachusetts to adopt a property tax exemption for year-round homeowners, shifting a higher percentage of the cost of town services onto the approximately two-thirds of residential property owners whose primary residence is elsewhere.

By a unanimous vote on Dec. 15, the Board of Selectmen adopted a 20 percent exemption, the maximum allowed under state law without legislative approval. The tax bill for a median value condominium, the most common form of housing in town, will drop by $685 if the owner receives the exemption, according to Town Manager David Panagore. The tax bill for the same condo owned by a part-time resident would increase by $144.

The selectmen do not view the exemption as a silver bullet, Panagore said, but part of a larger effort to address affordability in a popular vacation town with limited land for housing production, ever-escalating real estate prices, and a median annual income of $42,000 for year-round households.

“It’s a wealth transfer effect,” Panagore said. “Our partial homeowners – who are great people – they’re able to purchase a second home.”

The median single-family home in Provincetown is priced at $850,000, Pangaore said, while the median condo price is $369,900. Families struggle to find a condo when many of them are one-bedroom units.

Panagore drew a distinction between cities closer to urban centers that have a property tax exemption – such as Somerville, which raised its exemption to 35 percent through a home rule petition approved in 2014 – and vacation towns like Provincetown, Barnstable, Tisbury and Nantucket, all of which now have exemptions.

“The mechanics of the hot real estate market in the resort community is different than the hot real estate market in the urban and suburban [communities],” he said, pointing to the lack of land for building more housing and the fact that new development in resort communities usually relies on existing water and sewer infrastructure.

In addition to needing housing production for a range of income brackets up to and including the middle class, the town is looking to tackle affordability through legislation for a real estate transfer fee, the creation of a housing trust, and figuring out a way to get room occupancy taxes from people who rent their homes on Airbnb.
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