Elderly Deferral of Property Tax
From LoveToKnow Seniors
A number of states have established some type of an elderly deferral of property tax program. These programs are available to senior citizens, whose income falls below a certain threshold, to pay a reduced amount of taxes. Keep in mind that this is not the same as tax forgiveness: the full amount of taxes on the property in question are still payable.
Property Tax Deferral Programs
Some options for tax relief for the elderly are as follows:
- Provide a low-interest loan
- Set a limit on tax increases for seniors
- Offer tax credits to citizens of a certain age
- Freeze the property tax assessment on the property
Low-Interest Loan
In some states, the senior is responsible for paying only a portion of the property taxes owed each year. The portion of property taxes the senior will pay is determined based on his or her income from the previous year. The state government gives the senior a low-interest loan to cover the cost of the property taxes and puts a lien against the property.
For some programs, information with respect to income must be provided on an annual basis. The amount of mortgages or loans secured against the property is capped at a certain percentage of the fair market value of the property. In Minnesota, for example, this figure is 75 percent.
No payments are made on the loan as long as the senior continues to live in the home. When the home is sold or the senior citizen passes away, then the loan balance is due. Any refunds or rebates on property taxes will be held back by the government and go toward paying down the loan.
Setting a Limit
In New York State, low-income ($27,000 or less for 2007) seniors have the option of applying for a reduction of their property taxes. The state may reduce the amount of taxes collected on a property by up to 50 percent.
Municipalities can choose to grant tax relief to seniors on a sliding scale. In order to qualify for a smaller tax rate, the maximum income is $34,999. Contact your local city clerk's office to find out what options may be available to you.
Tax Credits
Another option is to apply for a property tax credit from the state government. Where available, the tax credit is offered to residents over the age of 65 at the beginning of the tax year. In the case of more than one owner of the property, the tax credit may be divided between them.
Freeze Property Tax Assessments
Freezing property taxes for seniors is another option. This is a welcome option for many seniors who are living on a fixed income. Even though their homes may be fully paid for, many seniors find it difficult to stay in their homes because they can't keep up with the rising property tax assessments. Some counties accept freeze requests based on the housing market and an individual's income.
Qualifying for Elderly Deferral of Property Tax
The criteria for qualifying for an elderly deferral of property tax vary by state. Primarily, property tax deferral programs are available to citizens over the age of 65. In some states, the programs are only available to those seniors whose income falls below a certain threshold. Other low-income residents under the age of 65 may qualify for property tax deferral programs as well.
For More Information
For more information about elderly deferral of property tax, please visit these helpful state websites:
Also contact the state or county revenue office nearest you.
This page has been accessed 567 times. This page was last modified 21:17, 26 June 2007.
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