Affordable Accessory Dwelling Unit
On September 23rd, 2022, Governor Baker signed the approved House Bill 4300 which is "AN ACT RELATIVE TO PROPERTY TAX EXEMPTIONS FOR AFFORDABLE ACCESSORY DWELLING UNIT RENTAL PROPERTIES IN THE CITY OF SALEM RESTRICTED AS AFFORDABLE HOUSING."
This essentially is an exemption for accessory dwelling units (ADU), some referred to as "in-law apartments" leased at a monthly rent, including utilities, not to exceed 70% of the Fair Market Rent (FMR) Limit established by the United States Department of Housing and Urban Development for the City of Salem for the most recent year. The FMR changes annually and are found on their website: https://www.huduser.gov/portal/datasets/fmr.html
The requirements for this exemption are as follows:
- A certificate of Occupancy issued from the Building Department on the ADU.
- Signed copy of the lease or a signed attestation from a tenant who is not paying rent along with their contact information.
- Scheduled interior inspection by the Assessing Department of the entire property, including all areas that do not encompass the accessory dwelling unit.
- Complete filled out application to be submitted to the Assessing Department on an annual basis.
The exemption amount is equal to the additional Kitchen and Bath rooms. However, in some circumstances the land use code/class code could change depending on the location of the unit within the primary building, which could potentially increase the value of the property. This is also a factor to consider when previously unfinished area is renovated or new structures are built.
Parcel owners who have received or are seeking a grant by the City of Salem for the purpose of building the Accessory Dwelling Unit shall not be eligible for the tax exemption for 20 years.
All applications and requirements are to be submitted to the Assessors Department every year no later than September 1st (accepting applications starting in February until September 1st), in accordance with Section 3 of the City Council ACT, in order for the exemption to be granted and reflected on the actual bills that are generated in January.
ADUs are permitted in buildings with up to four units in the RC, R1, R2 and R3 zoning districts. They cannot exceed 900 square feet or 50% of the size of your home, whichever is smaller, and must be at minimum 350 square feet. For more information, please see Salem's ADU Ordinance and ADU Act which lays out the criteria for an eligible accessory dwelling unit and contact the Building Department prior to filling out an application.
Click here for - Affordable Accessory Dwelling Unit Application Form
Click here for - ADU Facts and More Information