Photo by Rocketclips, Inc. / Shutterstock.com
If you’re an older homeowner in need of more cash, many states offer a little-known way to slash your property tax bill.
In about two dozen states, older homeowners can legally defer their property tax bills, Money magazine reports. These programs allow you to put off taxes for as long as you live in the home. When you die — or sell the home — the state steps in and finally claims the money, plus interest, from your home equity.
In many cases, states have age and income requirements that determine whether or not you will be eligible for their programs. But the ceiling on these income limits can be high.
For example, in Minnesota, you qualify for the program with an income as high as $60,000, Money reports.
Yet, in many states, few seniors take advantage of the tax break. For example, Money says just 10 percent use the tax break in Oregon.
Is the program right for you?
Before signing up for a property tax deferral program, it might make sense to talk to a financial adviser, tax adviser or other professional to determine whether this is the right program for you.
Alicia Munnell, director of the Center for Retirement Research at Boston College, tells Money that property tax deferral programs make sense for people who do not want to take more extreme measures — such as a reverse mortgage — to find new sources of cash.
It is a way to get some equity out of the house to defer expenses, but it’s much easier to do (than a reverse mortgage).
The Lincoln Institute of Land Policy offers a search engine that can help you discover if a property tax deferral program exists in your state.
Another way to lower your property taxes is to fight them. Money Talks News founder Stacy Johnson has done this successfully in two states where he has lived — Arizona and Ohio.
According to the National Taxpayers Union, 30 percent to 60 percent of taxable property in the U.S. is overvalued for property tax purposes, yet less than 5 percent of homeowners challenge them. In my experience, appealing tax bills isn’t all that difficult. And because it can result in saving hundreds — even thousands — every year, if you think you have a case, you should try it.
To learn more about how to take on your state’s tax code, check out “Ask Stacy: How Can I Fight My Property Taxes?”
How are you keeping your expenses low in retirement? Share your tips in comments below or on our Facebook page.