Tax Breaks

Property Tax Breaks for Retirees

Planning to buy a home in a different state? Property taxes should be examined closely, because they can be quite a bit higher than income taxes in many places.

If you’re scouting around for a new place to live in retirement, you need to consider sales, property and any other local taxes in addition to income tax rates. If you’re planning to buy a home in your new location, property taxes should be examined closely, because they can be quite a bit higher than income taxes in many places. This is especially true in popular retirement locations that have low or no income taxes, such as Arizona, Florida, Nevada, South Carolina, Tennessee and Texas.

You also should educate yourself about the property tax breaks, if any, available to senior citizens in each locale. They can cut down your property tax bill significantly if you qualify.

What You Should Look For

Those tax breaks come in different forms—exemptions, tax credits, deferrals and rate freezes. They also come with different restrictions, such as qualifications based on age, income or length of residence. Examine each one carefully. To give you a sense of what to look for, here are a few examples of the hundreds of individual property tax breaks available to seniors nationwide:

  • Arizona. Homeowners who are at least 65 years old, have lived in their primary residence for at least two years and fall below certain income limits (for 2020, one owner of a property must have total income of $37,584 or less, and multiple owners of a property must have a combined income of $46,980 or less) can have the valuation of their property frozen for three years.
  • California. Homeowners age 62 or older can postpone payment of property taxes. You must have an annual income of less than $35,500 and at least 40% equity in your home. The delayed property taxes must eventually be paid (payment is secured by a lien against the property).
  • Oklahoma. Seniors age 65 or older with income below $12,000 can claim an income tax credit for the amount that their property tax exceeds 1% of total income, up to $200.
  • South Carolina. For senior homeowners, the first $50,000 of their home’s fair market value is exempt from local property taxes. To qualify, you must be at least 65 years old and have been a legal resident of South Carolina for one year, as of July 15 the year the exemption is claimed.
  • Texas. For homeowners age 65 or older, $10,000 of the home’s assessed value is exempt from school taxes. Other taxing units may also offer an exemption of at least $3,000 to senior citizens.
  • Wisconsin. The Wisconsin Housing and Economic Development Authority provides property tax deferral loans for homeowners age 65 or older with an income under $20,000.

Use Kiplinger’s Retiree Tax Map to check on the property tax breaks available for seniors in each state.

Coronavirus-Related Property Tax Relief

Temporary property tax relief triggered by the coronavirus outbreak may also be available to retirees. “Many states are, of course, modifying tax-related due dates due to the COVID-19 pandemic,” says Emily Baugh, senior analyst at Wolters Kluwer Tax & Accounting. For instance, she says, the deadline for seniors applying for Oregon’s property tax deferral program was extended from April 15 to June 15, 2020.

Retirees can also take advantage of other coronavirus-related property tax relief measures for all residents, not just senior citizens. For example, Iowa and Indiana are temporarily waiving penalties for property taxes paid late.

Most Popular

The Perfect Storm for Retirees
retirement planning

The Perfect Storm for Retirees

Today’s retirees could face a perfect storm because they are living longer and spending more time in retirement, while at the same time losing access …
April 18, 2021
The Wrong Way to Achieve Wealth
personal finance

The Wrong Way to Achieve Wealth

For some down-to-earth, basic advice on money and life, I have a book to recommend: “Your Total Wealth: The Heart and Soul of Financial Literacy.”
April 17, 2021
Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
April 14, 2021

Recommended

What You Need to Know about College 529 Savings Plans
529 Plans

What You Need to Know about College 529 Savings Plans

Do you know how much you’re able to contribute or what the funds could be used to pay for? How about how contributing affects your taxes? Check out th…
April 14, 2021
37 Ways to Earn Extra Cash in 2021
business

37 Ways to Earn Extra Cash in 2021

We flag a wide variety of cool side hustles to earn bonus bucks to cover expenses expected and unexpected as we begin to emerge from the pandemic lock…
April 8, 2021
7 Ways to Save Money When Shopping Online
Smart Buying

7 Ways to Save Money When Shopping Online

Shopping online has long been a popular option. In these times, it’s increasingly a must. Here’s how to save money when filling your cart with the cli…
March 23, 2021
6 Money-Smart Ways to Spend Your Third Stimulus Check
Coronavirus and Your Money

6 Money-Smart Ways to Spend Your Third Stimulus Check

If you don't have to use your third stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
March 20, 2021