For some seniors and people with disabilities, property taxes can feel like the proverbial last straw on the camel’s back.
On the other hand, local governments need funding. They tax their residents to fund resources like emergency response departments, schools, and libraries.
How much will you owe in property taxes? It depends on what your state and local governments decide. If you’re a senior or have a disability, most states offer reductions. To offset the pain of inflation, some states have raised income thresholds this year, making tax breaks available to more seniors.
Read on, as we look at some highlights. We start with New Jersey, which taxes its homeowners more than any other state in the nation.
Relief on the Horizon: New Jersey
In New Jersey, the average house is taxed more than $9,500! That might be changing. The NJ governor just announced StayNJ, a plan to give a break to homeowners aged 65+. Assuming it passes, it’ll take full effect in 2026, and save eligible homeowners up to $6,500 through a tax credit. That’s as opposed to a senior or disabled veteran property tax exemption, through which some states will subsidize your property taxes completely.
☛ Property tax exemptions are available to eligible residents of New Hampshire and New York, Alabama, Florida, Georgia, Mississippi, and South Carolina, South Dakota, Texas, and Washington State, as well as in Alaska and Hawaii.
The income ceiling to get the break in New Jersey will be $500,000. Wait, what? That’s a lot of high-income earners getting a break, isn’t it?
Which raises a question: Are some states giving breaks to high-income people? Carl Davis and Eli Byerly-Duke, writing for the Institute on Taxation and Economic Policy earlier this year, asserted that tax breaks for older people, if poorly designed, drain state resources at the expense of others’ economic opportunity. They say tax structures should focus on people’s capacity to pay — not how old we are.
Many of the breaks explored below are designed to help homeowners with far lower incomes than the New Jersey plan would allow.
Pennsylvanians Get an Extended Deadline to Apply
There’s a new, extended deadline for older Pennsylvanians and homeowners with disabilities to make their annual application for rent or property tax rebates from what they paid in 2022. Instead of Jun. 30, the deadline is Dec. 31, 2023 to file for the Property Tax/Rent Rebate.
Who qualifies? Pennsylvanians aged 65+; surviving spouses aged 50+; and people with disabilities who are at least 18. They can currently get back up to $650. (Supplements automatically boost rebates higher for some applicants.)
Moreover, Gov. Josh Shapiro now plans to increase standard rebates to $1,000. Income limits for both renters and homeowners will become $45,000 (to rise in the future with inflation). The current income ceiling is $35,000 a year for homeowners and $15,000 annually for renters. (Half of Social Security income and all veterans’ payments won’t count.)
This means bigger rebates. And it means more rebates. Some 175,000 new Pennsylvanians will qualify for tax or rent rebates when the new plan becomes effective.
Maryland Elderly Property Tax Credit
Here is Prince George’s County, Maryland’s updated Property Tax Credit for Elderly Individuals. As of July 2023, Maryland’s giving up to 20% in credits for county property taxes for up to 5 years.
Eligible Maryland homeowners aged 65+ may apply if their home’s assessed value is a half-million dollars or less. Learn more from the state’s Elderly Property Tax Credit Application FAQs.
☛ Can people request breaks on property taxes? In some states, yes: you might qualify for a property tax break!
Does Your State Let Seniors Delay Paying Property Taxes?
Seniors in some states can accept liens on their homes in order to put off their property taxes. Tax deferrals are available, for example…
In Colorado, where homeowners aged 65+ can defer taxes at an interest rate under 3%. Colorado homeowners whose taxes rose 4% over the past two years can now apply to defer some of those taxes.
In California, people aged 62+ can defer property taxes if the household earns no more than $49K and has a certain level of home equity. Funds are limited, so delay is not recommended!
In Idaho, the Property Tax Deferral Program lets seniors and surviving spouses with household incomes up to $53,638, defer taxes. Applications are due by Sep. 5, 2023 for 2022 tax rebates.
In Illinois, eligible seniors may defer property taxes and special assessments up to $7,500 yearly in property taxes and special assessments. The state has raised the household income limit to $65,000, as the Illinois Department of Revenue reminds seniors.
In Iowa, a new tax break gives seniors up to $3,250 off the assessed value of their home in property tax rebates (subject to future increases).
In Massachusetts, property tax deferrals for homeowners aged 65+ are run locally.
In Minnesota, residents aged 65+ can get partial property tax deferrals. Couples can apply if the other spouse is aged 62+.
In North Carolina, homeowners aged 65+ can get tax deferrals up to a certain percentage of income.
In Oregon, there are property tax deferrals for those aged 62+. The state does charge 6% in interest.
In Utah, county rules control property tax deferrals. Publication 36 has a contact directory. Additional relief is offered to financially stressed homeowners aged 65+.
In Tennessee, see the state’s property tax relief FAQ. Nashville residents aged 65+ may participate in local tax deferrals.
In Texas, homeowners aged 65+ may use a Tax Deferral Affidavit to defer property taxes.
Washington State also has a property tax deferral option; see details on exemptions and deferrals.
In Wyoming, counties offer deferrals for vets and residents aged 62+, as detailed in Wyoming’s property tax relief information.
Property Tax Breaks: Summing Things Up
Some states offer property tax exemptions, usually based on a percentage of the home’s value. Some states offer a plan for property tax credits. And some states let eligible homeowners defer their property taxes. These typically involve liens. They require repayment eventually (and they do charge interest), so they should be used carefully. Death, selling, or renting out the home will usually make the lien due for a payoff.
As home values soar, some states are increasing the relief they give. Residents can check with their state’s treasury department for updates. Even counties are offering locally run initiatives, so it’s good to stay alert!
Supporting References
Pennsylvania Pressroom (Harrisburg, PA): Application Deadline Extended To Dec. 31, 2023 For Property Tax/Rent Rebate Program (Jun. 12, 2023).
Carl Davis and Eli Byerly-Duke for the Institute on Taxation and Economic Policy via ITEP.org: State Income Tax Subsidies for Seniors (Mar. 23, 2023; internal citations omitted).
Pete Grieve for Money.com (part of Money Group, LLC): Real Estate News – More States Are Giving Property Tax Breaks to Seniors, With Savings up to $6,500 (Jun. 27, 2023).
Jennifer Schell for Annuity.org: Property Taxes by State (updated Jul. 13, 2023; internal citations omitted).
Deeds.com: Welcome News: Some States Are Helping Seniors Defer Their Property Taxes (Apr. 5, 2023).
Refer to the provided links for more information.
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