For many older homeowners, the mortgage is paid off but the property tax bill keeps rising. On a fixed income, it can become one of the biggest threats to staying in your home. Most states offer some form of property tax relief for older adults, but you usually have to apply.
Types of property tax relief
Homestead exemptions. Many states reduce the taxable value of a home that is your main residence. Some offer a larger exemption to homeowners over a certain age, often 65.
Senior exemptions. Some states or counties exempt part of an older homeowner's property value, or reduce the tax, often based on income.
Assessment freezes. These lock in your home's assessed value, or your tax bill, at its level when you qualify. Your taxes then do not rise as property values go up, although rate changes may still apply.
Tax deferral programs. These let eligible older homeowners postpone paying property taxes. The deferred taxes, often with interest, become a lien on the home and are repaid when the home is sold or after the owner's death.
Circuit breaker credits. These give a credit or refund when property taxes exceed a certain share of your income. Some states offer a similar credit to renters, since part of rent goes to property taxes.
Exemptions for veterans and people with disabilities. Many states offer additional relief for disabled veterans, surviving spouses and homeowners with disabilities.
Who qualifies
Each program has its own rules, which may include:
- A minimum age, often 61, 62 or 65.
- Income limits, sometimes including Social Security.
- Owning and living in the home as your primary residence.
- Living in the state or county for a minimum number of years.
- A limit on home value or other assets.
How to apply
- Contact your county assessor or tax collector, by phone or online. Ask which programs exist for older homeowners and how to apply.
- Ask about deadlines. Missing a filing date can mean waiting a full year.
- Gather documents, such as proof of age, proof of income (Social Security and pension statements, tax returns) and proof that the home is your primary residence.
- Ask whether you must renew each year, and put the date on your calendar.
Questions to ask about deferral programs
Tax deferrals can help you stay in your home, but they reduce the equity you or your heirs will have later. Ask:
- What interest rate is charged on deferred taxes?
- When must the deferred amount be repaid?
- What happens if I move into assisted living or a nursing home?
- Can my spouse continue the deferral if I die?
If you are behind on property taxes
Contact your county tax office right away. Many offer payment plans, and some have hardship programs. Do not ignore notices, since unpaid property taxes can eventually lead to a tax sale or foreclosure. A legal aid office or HUD-approved housing counselor can help. If you have a reverse mortgage, unpaid property taxes can cause the loan to come due. See reverse mortgages.
Other ways to lower housing costs
Read downsizing your home, practical ways to lower your utility bills and how to find benefits you may qualify for.
