Taxes keep going up, following property values. But some homeowners — and buyers — can tap into county or state property tax breaks.
Some states exempt seniors from property tax. Some states let eligible homeowners put off paying property taxes — in many areas, for as long as they own the home. An exemption doesn’t have to be paid back. A tax deferral does.
Plans are being expanded in some locations, so it’s always worth it to check in with your government’s revenue department if you think you might be eligible.
Tax Deferral: Tax Relief That Acts Like a Loan
How do deferral initiatives work? The government records a lien on the property. After death of the owner, a deed transfer, or the use of property for rental income, a certain number of years’ worth of deferred taxes will become due.
Here are some examples of these programs.
In Colorado
Colorado taxpayers in good standing, who turn 65 before a given calendar year, may then start to defer taxes on their primary residences, applying through their county treasury offices. This is a lien. (If your mortgage is less than five years old, the mortgage company must agree to the lien.)
Deferral is separate from the senior property tax exemption, whereby the state pays your property taxes outright.
There’s interest on deferred taxes, but it’s under 3% in Colorado. Death or the rental or sale of the home usually triggers the payment-due date. Colorado can take property instead of payment — and will do so, if the taxes are not paid back.
This year, Colorado broadened the plan to help seniors whose taxes shot up in 2020 through 2022. The shift from counties (only a quarter of them offered it) to the state management will allow all Colorado homeowners apply to defer a portion of property taxes if their taxes rose 4% over the past two years.
In California
California’s Property Tax Postponement Program allows people aged 62+ to defer property taxes if the household earns no more than $49K and has a certain level of home equity. Watch the state website for the application deadlines for the 2023-2024 tax year. Funds are limited, so it’s first come, first served.
Then there are the tax savings for downsizers — home sellers aged 55+ who buy another home of the same or lesser value. These buyers pay the same taxes on their replacement home as they were paying on their former home, thanks to the Proposition 19 Reappraisal Exclusion for Seniors.
In Idaho
Idaho’s Property Tax Deferral Program lets seniors and surviving spouses defer taxes. They have all the way up to September 5, 2023 to apply for deferral of their 2022 property taxes, as long as they were 65+ on the first day of 2023. Household income is capped at $53,638 for eligibility.
Further information appears on Idaho’s Property Tax Deferral webpage.
In Illinois
In Illinois counties, such as Cook County, qualified seniors (65+ before June 1 of the year of applying) may defer up to $7,500 yearly in property taxes and special assessments on the home they’ve lived in for the past three or more years. The Senior Citizens Real Estate Tax Deferral Program amounts to a loan which the property must repay when selling, or upon death. This is up from $5,000 in previous years. The household income eligibility ceiling is up from $55,000 to $65,000. This will allow for more help to residents in a time of inflation.
Your county tax department has the applications.
In Maine
Maine homeowners should check their tax assessments when they come in the mail. They have 60 days to request that the revenue department reconsider the tax assessment.
☛ Where are property taxes highest and lowest? How does a homeowner appeal? Read our guide to Property Taxes, and How Not to Overpay Them.
In Massachusetts
Massachusetts state law allows local programs to reach older residents with property tax deferrals.
Deferral applications are generally due up to three months after tax bills are mailed. Applicants should be aged 65 by July 1 of the tax year. Additional criteria appear in the Taxpayer’s Guide to Local Property Tax Deferrals, published by the Massachusetts Department of Revenue.
Property tax deferrals were spearheaded by the city government of Cambridge, which continues to be one of the most generous cities for tax deferrals. And the City of Boston encourages residents aged 65+ to apply for deferrals by mail or in person.
In Michigan
The general rule is that people 62+ submit an application by September 15 to the local treasury department; see Michigan’s Summer Tax Deferment fact sheet for further details on due dates.
For more information: Visit the Michigan Department of Treasury’s Deferment of Property Taxes webpage. Note that Michigan says it will no longer offer property tax deferments for senior homeowners. Check with your township regarding the current process.
In Minnesota
Minnesota empowers its residents aged 65+ to apply for partial deferments of property taxes. Couples can apply if one spouse is at least 62, as long as the other is 65+.
Apply in advance of the deferment year. The deadline is November 1, 2023, for deferment of your 2024 property taxes. For income limits and further information, Minnesota’s Department of Revenue publishes the details on its Property Tax Deferral for Senior Citizens webpage.
In Pennsylvania
Tax rebates are automatically sent to seniors of modest earnings in highly taxed Pennsylvania cities. Rebates in some cases go up to $975. For more information, see revenue.pa.gov/PTRR. Philadelphia property tax deferral is available to eligible owners whose primary residence’s property tax has risen substantially. And Pennsylvania offers tax breaks to people aged 65+ who earn up to $35K a year, as well as surviving spouses aged 50+ and adults with disabilities. (Applicants may subtract from their income half of Social Security benefits and all veterans’ payments.)
Many Pennsylvanians opt into their local homestead exemptions. Philly homeowners can “typically save up to $1,119” yearly!
☛ Could you use some reminders to help you stay well prepared for taxes and tax breaks? See our guide to Tax Tips for Homeowners to Keep in Mind All Year.
In North Carolina
For homeowners aged 65+, North Carolina’s property tax deferrals are annually capped at a certain percentage of income. The owner’s income limit for the 2022 tax year is $31,900.
For those who qualify, property taxes will be limited to 4% of the owner’s income. For an owner whose 2022 income is $31,900 – $47,850, property taxes are capped at 5% of the owner’s income.
In Oregon
Property tax deferral for Oregonians aged 62+ carries a 6% interest rate. To take the lien off the title, the household or estate has to pay back the money after death, a sale or move (except if compelled for ill health), or any change of the name(s) on the deed. Manufactured homes can keep deferrals as long as they stay in-state.
Learn more or apply through the state’s tax department.
In Utah
Seniors are a little older, and their deferments a little more complicated, in Utah. For example, Summit County residents aged 75+ with trust-owned real estate can qualify for property tax deferral. They can skip property taxes each year, but here again the taxes will keep adding up, with interest. The total gets charged to the person’s estate after death.
But that’s not the only break offered in Utah. Further tax relief is available for homeowners aged 65+ on a hardship basis. The Utah tax commission’s Publication 36 has a directory of county phone numbers, which helps residents learn what’s available locally.
In Tennessee
Tennessee offers its elder homeowners breaks on taxes. See the state’s property tax relief FAQ. For qualifying residents aged 65+ there is a property tax freeze provision, too. That means new tax assessments will not affect these homeowners.
Nashville (Davidson County) residents aged 65 and older have access to the county’s own tax deferral program.
In Texas
In San Antonio, Houston, and all other Texas jurisdictions, homeowners aged 65+ should check into the Tax Deferral Affidavit. It allows Texans to defer their property taxes.
☛ Can people in other states object to their taxes, now that property values are sky-high? See more information at Deeds.com, because… You Might Be Eligible for Tax Breaks!
In Washington
The state of Washington also has a property tax deferral option for people who turn 61 in the year before they request deferment. The state’s tax department has more information on exemptions and deferrals.
If you’ve already paid property taxes in past years because you didn’t know about the state’s tax exemption offerings, you might be able to get a refund.
In Wyoming
Wyoming’s counties offer information on property tax deferrals for residents aged 62 and over. You have until November 10 of the year your property is taxed to apply.
Call your county to find out if you qualify. In general, check the Wyoming’s property tax relief information. Check in again from time to time. Tax relief in Wyoming and in all states can change.
With Home Values So High, States Are Under Pressure to Go Easy on Property Taxes. Watch for Changes.
Many states have seen huge rises in property values — and some are offering tax relief. Your state’s treasury department will have current information. Also, check with your own county for local initiatives.
Deferred taxes don’t go away. They do incur interest. Use them carefully. If you are not eligible but would like more financial flexibility, you might look into applying for a reverse mortgage, and other options. As always, speak with a wills and trusts attorney to make the most effective plans for your estate and your loved ones.
Supporting References
Colorado Treasury Press Release: State of Colorado Expands the Property Tax Deferral Program (Jan. 25, 2023).
Illinois Department of Revenue: Illinois Department of Revenue Reminds Eligible Taxpayers to Take Advantage of Senior Citizens Tax Deferral Program (Feb. 14, 2023).
Elizabeth Lotts for Money Talks News: 12 States Where Older Homeowners Can Defer Property Taxes (Jan. 3, 2023).
And as linked.
Photo credits: RODNAE Productions and Marcus Aurelius, via Pexels.