"For the first time, a Massachusetts court has ruled that the way some municipalities pursue tax-taking cases against homeowners — a practice critics call “equity theft” — is unconstitutional.The ruling comes in the wake of a unanimous US Supreme Court decision last year that said municipal and county governments may only recover the taxes owed, and not seize the remaining equity in the property.Massachusetts is one of only a handful of states that presently allow local governments to take not only the taxes they are owed (plus interest and fees) but also the rest of the equity in properties.Most often, the cases involve people who have inherited real estate and own it without a mortgage but lack the income to pay the taxes. In some instances, property worth hundreds of thousands of dollars is taken by municipalities when the amount owed in taxes is a small fraction of that.
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Massachusetts law is mostly silent on the question of equity, and in the absence of an explicit prohibition, some municipalities have assumed the right to keep the full equity, with few safeguards for property owners.
Callan, in his ruling, said the state law used by municipalities in tax-taking, known as Chapter 60, does not provide a recovery process and therefore is “unconstitutional as applied in circumstances, such as here, where the tax debt is less than the value of the property.”
Chapter 60 “in its present form, is untenable and requires legislative correction,” Callan wrote in his 19-page ruling."
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/cloudfront-us-east-1.images.arcpublishing.com/bostonglobe/44PPFXB6WGK6LGIOHRVULC6NUI.JPG "In 2017, the City of Greenfield targeted Stephen Woodbridge’s property for unpaid taxes of a little less than $6,000. Four years later, the city succeeded in gaining legal ownership of a property that had been in the Woodbridge family for 70 years. MATTHEW CAVANAUGH/FOR THE BOSTON GLOBE") |
| In 2017, the City of Greenfield targeted Stephen Woodbridge’s property for unpaid taxes of a little less than $6,000. Four years later, the city succeeded in gaining legal ownership of a property that had been in the Woodbridge family for 70 years. MATTHEW CAVANAUGH/FOR THE BOSTON GLOBE |
