How Much of a Tax Break Do Seniors Get for Property Tax?
Owning a home or property means paying property tax to your local tax authority. The tax goes to roads, schools, parks and other municipal expenses, and is based on the assessed value of your home. In many states, senior citizens can take advantage of tax deferrals or exemptions, as long as they meet the qualifying guidelines.
Seniors who meet state guidelines can take advantage of an exemption. In Washington, for example, you may claim an exemption if you were at least 61 years old in the previous year and have a household income of less than $35,000. Depending on your income level, this exemption can be standard, partial or full. A full exemption means that you pay no tax on the first $60,000 or 60 percent of assessed value, whichever is greater.
A deferral means you can delay paying property taxes, as long as you meet the age and income guidelines. The property tax becomes a lien on your house, which gathers interest as long as it goes unpaid. In Washington, that rate is 5 percent a year. If you no longer meet the guidelines, you must start to pay back the property tax.
All states enforce rules on your application for a tax exemption or deferral. In Colorado, you must apply by July 15 for the current year. If you neglect to get the application in by the deadline, you can't claim the exemption -- you'll have to wait until next year. Colorado law allows for an exemption or tax deferral to anyone who is 65 or older and who has lived in their home for at least 10 years. The program also benefits disabled veterans, who must occupy their residence only since January 1 of the current tax year. The exemption amount is 50 percent of the assessed value up to $200,000.
Spouses and Survivors
A property tax break may also be available if you're the survivor of a qualified taxpayer. In Alaska, the tax exemption is available to residents 65 or older; the amount is 10 percent of assessed value, with a maximum exemption amount of $10,000. If a qualified taxpayer dies, his survivor can maintain the exemption as long as she is at least 60 years of age. No new exemption application is required. In Alaska and elsewhere, you don't need to submit an application every year; as long as you have already filed one and continue to be qualified, the exemption or deferral will still be available.
Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.