Legal advocates say the bill could help homeowners pay back property taxes

A group of homeowners and the legal organizations that represent them recently expressed support for a bill that could “dramatically” reduce the burden on homeowners struggling to pay back property taxes.

“This legislation would be a huge help to people who have a lot of money but not many homes,” said Todd Kaplan of Greater Boston Legal Services.

Under current state law, homeowners without a mortgage who become indebted to the city for taxes risk losing the equity they put into their homes.

Three legal organizations — Greater Boston Legal Services, Central West Justice Center and Pioneer Public Interest Law Center — held a press conference Friday expressing support for legislation that would establish repayment plans that would make it easier for homeowners who are behind on their property taxes to repay.

In April, a Hampden County Superior Court judge ruled that Springfield’s property tax garnishment was unconstitutional.

The decision came after Ashley M. Mills, 25, a Springfield homeowner, filed an appeal against the city’s tax policy.

Mills was facing foreclosure on a $20,000 property tax debt she couldn’t pay. She inherited the Felicia Street farm, worth about $230,000, from her grandmother and lives there with her toddler son and disabled mother.

Under the old system, the city would have been allowed to keep all proceeds from the tax sale. According to the legal organizations, it would have been “theft of equity” worth more than $200,000.

In Springfield, the repayment plans for homeowners are “narrow,” Kaplan said, meaning people who should qualify for the plan often don’t.

Other state courts are not bound by the ruling in the case between Mills and the city of Springfield.

If passed, the new legislation would cut interest rates on the debt in half (from 16% to 8%), allow interest to be forgiven and reduce the down payment required to access a repayment plan from 25% to 10%, Kaplan said.

The legislation would also allow excess equity to be declared as unclaimed assets, so people can still get back money that’s theirs, he said.

According to a Land Court ruling, there is still a risk of Mills being seized.

“She needs a better payment plan that will allow her to pay off her tax debt,” Kaplan said.

He explained that Mills and other homeowners in the state who don’t have mortgages are having trouble paying back the taxes they owe to the city.

“This is affordable housing for her,” he said.

Even if the measure is passed by the governor, municipalities will have to make their own decision to include a repayment plan and possible interest waiver in their local ordinances, he said.