SALEM, MA — Salem homeowners looking to take advantage of the new municipal ordinance allowing accessory dwelling units — or so-called "in-law apartments" — can apply for a grant up to $47,500 for the design and construction of the ADU, along with benefiting a state law that exempts the value of the ADU from property taxes, as long as they are renting the units well under what is considered fair market value.
The ADU ordinance, which is designed to increase affordable housing inventories through homeowners renting out a portion of their homes at discounted rates, in Salem includes a provision in which the grant money can be used to transform the rental space as long as it is rented at 50 percent of fair market value.
The state law, which State Sen. Joan Lovely (D-Salem) and State Rep. Paul Tucker (D-Salem) advanced through the state legislature after Mayor Kim Driscoll proposed it, allows homeowners to exempt the property tax as long as they are renting the ADU, including utilities, at 70 percent or less than fair market rate.
Gov. Charlie Baker signed the tax exemption into law this past week.
"The passage of this special act ushers in a new age of stability and security for homeowners and renters throughout Salem," Lovely said. "Doubly effective, this landmark law supports property owners by creating additional revenue and tax incentives, while supporting renters through the addition of new, affordable units to Salem’s housing stock.
"With inflation on the rise and our affordable housing crisis worsening, the passage of this act could not have come at a more critical time."
According to the city, that means to qualify for the state tax discount, the maximum rent and utilities for a studio ADU would be $1,417.50 per month, for a one bedroom it would be $1,538.60, and for a two bedroom it would be $1,844.50.
To qualify for the 50 percent municipal grant, the studio rent would be no more than $1,012.50, the one-bedroom rate would be $1,099 and the two-bedroom rate would be $1,317.50.
Salem homeowners who may be eligible for this property tax exemption should contact the Assessor’s Office at 978-619-5608. Applications for the exemption must be submitted annually.
To review the grant program guidelines and requirements to apply visit here.
(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. Twitter: @Scott_Souza.)
