Welcome to Westport Health Notes, a monthly column from the Westport Board of Health (BOH). The goal is to share information with our community about local issues and projects, public health alerts, and even fun facts about the A to Z scope of responsibility that local Boards of Health manage.

The recently enacted Massachusetts Tax Relief law provides a substantial increase in the amount of tax credit available to homeowners who upgrade their failed residential septic system. The advocacy and collaboration among our legislators, Senator Rodrigues and Representative Schmid, the Westport River Watershed Alliance and this board played a key role in drafting and shepherding the septic credit provision through the Legislature and onto the Governor’s desk.

The septic tax credit is a reduction in the homeowner’s personal tax obligation after all other exemptions are taken. There are several factors that come into play in calculating the total amount of credit. The maximum percentage of the cost to design and install a system upgrade eligible for credit was increased from 40 to 60 percet. The total amount of tax credit available is capped at $18,000, three times the amount available under the prior law. The credit that can be taken annually was more than doubled to a maximum of $4,000. Any excess credit above the annual threshold can be carried over each year for an additional five years up to the $18,000 total cap. The board’s issuance of a Certificate of Compliance for the system upgrade starts the tax year when the credit can be taken.

Assume a taxpayer’s system upgrade cost was $30,000, the maximum eligible credit would be $18,000. If their total taxable 5 percent income was $80,000, just below the town’s median income, the tax obligation would be $3,000. That tax bill could be offset entirely by part of the septic tax credit in the year the system was completed, with the rest of the credit carried forward to be applied in future tax years (for up to 5 years). While that amount would not cover the full system cost, it does create significant financial benefits. For example, a homeowner takes out a $30,000 loan to cover the system’s full cost. Under the board’s Community Septic Loan Program’s 5 percent interest rate, the $18,000 in saved taxes would nearly equal the total interest due under the 20-year loan. In effect, a 0 percent loan.

Low interest septic repair loans are also available for homeowners in lower income tax brackets. The board administers a 1 percent loan program for low to median-income residents whose system upgrade includes nitrogen reduction technology. The Mass Housing septic loan program provides up to $25,000 loans at 0 percent for borrowers whose income does not exceed $63,800. Repayment is deferred until home’s sale, transfer, or refinancing. The program also provides 2.5 percent loans for 15 years for homeowners with income up to $127,700. The loans are administered through participating lenders, including BankFive in Fall River and First Citizens' Federal Credit in Fairhaven.

Further details on the septic tax credit will be forthcoming in a Department of Revenue guidance document. For information on the Board’s septic loan programs, please contact: Nelia Williams, Program Administrator- 508-858-1008, williamsn@westport-ma.gov.