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Message #686 Property tax postponement for seniors

mp3 #686 Property Tax Postponement for Senior Citizens and Disabled Persons (mp3 file)


If you are 62 years of age or older, or if you are blind or disabled and under the age of 62, and if you live in a home which you own or are buying, have 20% equity interest in your home, and if your total household income in the last year was under $24,000, you may be eligible for property tax postponement. However, if you filed a property tax postponement claim and qualified during 1983, you have an income limit of $34,000, instead of $24,000. This state program allows California's senior citizens, blind, and disabled persons, to postpone paying all or part of the property taxes on their homes, for an indefinite period. The purpose of this property tax postponement program for these homeowners is to make it possible for you to continue living in your own home as long as possible, even if you do not have enough money to pay for your property taxes during your blind, disabled, or retirement years.

Here is how it works. When you postpone your taxes, an account will be established at the state controller's office in your name. Because the postponement program is really a low-interest loan, a security document, which is called a property tax postponement lien, will be recorded on your home by the state controller's office. Simple interest will be charged each year on the postponed amount. You do not have to pay the postponed taxes plus interest until you move out of your home, sell your home, no longer have 20% equity in your home, you die and do not have a spouse, or domestic partner, or other qualified individual who continues to reside in the home, or you allow future property taxes to become delinquent. You may, of course, pay off all or part of the postponed taxes plus interest at any time.

The simple interest rate is a variable rate, instead of a fixed interest rate. The variable rate is based upon the interest earned by the state's pooled money investment board fund, and that rate changes each year. The simple interest rate for fiscal year 2005-2006 was 2%.

Many owners of mobile homes are also eligible for property tax postponement, even if you as the owner of a mobile home do not own the land on which your mobile home is located. If your mobile home is on your county's secured property tax rolls, and if you meet all the eligibility requirements for other homeowners, you may be eligible for property tax postponement. If you do not own the land on which your mobile home is located, a special form is provided, for the legal owner of the land to give you permission to obtain property tax postponement on your mobile home.

As a blind, disabled, or senior citizen homeowner, how do you postpone paying your property taxes? You must file a claim with the state controller's office for each year that you wish to postpone taxes. Only one claim may be filed for each home. If you qualify, the state controller will mail two certificates to you. One certificate is for the first installment of property taxes, which must be paid by December of each year, and the other certificate is for the second installment, which must be paid by April of each year. These certificates may be used by you to postpone all or part of the taxes on your home, or you may decide not to use them at all. The postponement occurs only after you have signed the certificates and forwarded them to your county tax collector. The state will then reimburse the county for your property taxes.

When do you file your claim? The filing period is from May 15th to December 11th.

Where do you get your claim form and instructions? You may mail your request to the State Controller - Division of Collections, Property Tax Postponement Program, Post Office Box 942850, Sacramento, California 94250-5880 , or you may telephone a toll-free number from 8:00 a.m. to 4:00 p.m., Mondays through Fridays; the toll free number you dial is 1-800-952-5661. You can also contact them by email at postponement@sco.ca.gov

What are the eligibility requirements for homeowner’s property tax postponement? You must meet four requirements:

1-To be eligible as a senior citizen, you must be 62 years of age or older, by December 31 of the year your first installment taxes are due. All other recorded owners of your home must also be age 62 or older, but this requirement does not include your spouse or direct-line relatives such as your parents, children, or grandchildren, or any of their spouses. To be eligible as a blind or disabled person, you must be legally blind, or mentally disabled to the extent that for the past year you could not work or engage in substantial gainful activity.

2-You must have owned and occupied your home as your principal place of residence since December 31st of the previous year. This also applies to all other owners of the house, except for your spouse and direct-line relatives.

3-Your total household income must not be more than $24,000. The income of everyone in your household must be included, except for minors under the age of 18, full-time students, and renters. If, however, you filed a claim and qualified in 1983, your total household income may be up to $34,000, to qualify for property tax postponement in later years.

4-You and the other owners of the house must have a combined equity interest in your home of at least 20% of the full value, as shown on your property tax bill, and not necessarily what your home is worth on the current market. In other words, taxes cannot be postponed if there are liens, deeds of trust, mortgages, or other encumbrances against your home which amount to more than 80% of its full value, as shown on your property tax bill.

May you transfer your property tax postponement lien to another home? Yes, you may. If you sell your home and buy another home, you may have the lien transferred to your new residence. To do so, ask the state controller's office to send you an election to transfer form.

What if you have a life estate interest in the home, or you own the home under a contract of sale? You may still apply for a property tax postponement, but you must attach to your claim a written consent from the persons who will own the life estate property when you die, or who hold title to the property under the contract of sale.

Property tax postponement is also available if you own and occupy a residential unit in a cooperative housing corporation. It is also available if your home is located on possessory interest property, which is land in California that you do not own, but which to you have the right to possess and occupy for at least 45 years from the time you first make your claim.

May you file for both property tax postponement and for homeowner assistance? Yes, you may. Property tax postponement is a separate and distinct program from the homeowner assistance program. You may participate in either program, or you may participate in both. Homeowner assistance is a once-a-year reimbursement to you by the State of California of a portion of the property taxes paid on your home. You may qualify if you are 62 or older, or blind or disabled, if you live in your own home, and if you have a total yearly household income below $40,811. The homeowner’s assistance program is administered by the State Franchise tax board, and the filing period is from July 1st through October 15th of each year. If you qualify and participate in both programs, the amount of homeowner assistance you are entitled to receive will be applied against the state's property tax postponement lien on your property.

Remember, you must file each year, between May 15th and December 11th, for property tax postponement, and each year you must meet all the current eligibility requirements. For a postponement claim booklet and additional information, call, email or write the State Controller's Office in Sacramento, California.

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