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A Senior Citizen’s Guide to Paying Property Taxes

Jul 23, 2012
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It’s an increasingly pressing problem: paying property taxes. With budget cuts at the state and Federal level, the burden continues to fall on municipalities to pay for essential services, which equates to higher and higher property taxes for property owners.

This problem is particularly challenging for seniors, as most live on a fixed income. While property taxes are on the rise, benefits for seniors are not. This means that many retirees feel an extra pinch when it comes to paying increased property taxes.

You may have heard tales of little old ladies losing their homes because they couldn’t pay property taxes on a house they got for $5,000 forty years ago. Apocryphal or otherwise, such modern day horror stories do point out a very real concern for people on fixed incomes: how to pay property tax for seniors, on a house that is now worth far more than the original purchase price.

Property Tax Exemptions for Senior Citizens

Fortunately, there are a number of communities that have exemptions for senior citizens. If you, your parents, or anyone else is having trouble paying local property taxes, it’s time to look into state and city programs for assistance.

Every city has different requirements with regard to age, income and widow/widower status, so there’s not much advice we can offer about the specific programs in your area, but taking a general look into the senior property tax exemption programs is a good place to start.

Sometimes the state or local government will help with the entire property tax bill. In other cases, you can receive a drastic reduction in the amount you have to pay. Either way, it’s worth looking into. Even if you can afford your property taxes, you might want to see if you qualify — you might be paying more than you need to.

How to Appeal Your Property Tax Bill

For those who don’t qualify for an exemption, nearly every city allows you to appeal your property tax bill. Again, the specifics vary from one area to another, but it basically consists of getting a second opinion on the value of your home.

You can find out how to appeal by contacting your city or county tax assessor’s office. There might be red tape involved, but the potential cost savings is probably worth it.

There are four main reasons for appeal:

  • Comparison: You have done research and found that comparable homes have been assessed at a different value than your own.
  • Error: You can prove that the original assessment was too high because of an error on the part of the assessor. This is the best way to go if you feel the assessor did a “drive-by” assessment, rather than taking an in-depth look at the property.
  • Pace: If your home has not increased in value at a pace similar to the rest of the market, you can likely have your tax bill reduced.
  • Decline: This is the big issue in the current real estate market. Like many homeowners, the market value of your property probably hasn’t increased. In fact, it has likely declined. If you’re still paying property taxes on the “pre-real estate crash” value of your home, get an appraisal and get one now.

The reality is, very few people lose their homes because of their inability to pay property taxes. The more likely result of not paying property taxes is a high-interest repayment plan and/or getting hit with a penalty that can affect personal finance.

In some cases, property owners get a lien put on their homes. The lien may also be attached to any other properties they own in the jurisdiction. While this might present potential probate problems, if you plan on staying in your home until you die, a tax lien is probably the least of your worries.

Nicholas Pell is a freelance writer living in Los Angeles, CA. He pays too much for a rental unit.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on your taxes, your investments, the law or any other business and professional matters that affect you and/or your business.

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