All for Joomla All for Webmasters
FINANCE

As a Senior, When Can I Stop Paying Property Taxes?

As a senior citizen, you probably will end up paying property taxes for as long as you are a homeowner. However, depending on the state you live in and often once you hit your 60s (usually around the ages of 61 to 65), you may be eligible for a property tax exemption. This exemption is often referred to as a homestead exemption for seniors and sometimes as a “senior freeze.” It’s important to understand how this works in order to determine if you’ll be able to take advantage of this property tax exemption. You can also work with a financial advisor who can help you make a retirement plan, including any tax savings or exemptions that you may qualify for.

Also ReadSocial Security Benefits Get a Cost-of-Living Adjustment (COLA) in 2025. But There Is a Big Problem for Retirees.

How Do These Property Tax Exemptions Work?

Every state handles property tax exemptions differently, but generally, a homestead tax exemption program does not mean that you will stop paying any property taxes as a senior. These typically are programs that reduce your future property taxes but not do end them. After all, most local governments are funded by property taxes. If property taxes disappeared entirely for seniors, cities and town budgets would likely suffer.

Frequently, the way these programs work, the assessed value of the property freezes, once you have successfully applied and been accepted for a homestead exemption. So if your home’s property value was frozen at $200,000, five years from now, if your home is now worth $220,000, you’ll be paying taxes on a $200,000 home and not a $220,000 home.

Also Read– Social Security August 2024: This Is When You’ll Get Your Check This Month

As noted above, the taxes homeowners pay will differ from state to state. For instance, Ohio allows qualifying homeowners to exempt up to $25,000 of the market value of their homes from all local property taxes. So if you were eligible for the state’s property tax exemption and have a $150,000 home, once you crunched the numbers with a property tax calculator, the property taxes would possibly be calculated as though your home’s market value was $125,000.

Ultimately, these senior freezes don’t just provide a needed monetary break for seniors, it can help keep them in their homes and neighborhood. After all, a senior citizen is often living on a fixed income. If property values keep climbing, a senior making a low to moderate income may struggle to remain in a home that they’ve spent most of their life in.

Each place has different laws that may or may not affect seniors, and property tax laws may change over time. A financial advisor can help you navigate property taxes and more. Get matched with a fiduciary advisor today.

Also Read Kamala Harris’ Platform: How Her Plan for Social Security and Medicare Could Impact Your Finances

Factors You’ll Want to Keep in Mind With a “Senior Freeze”

Because states all handle property tax exemptions differently, you may find that you don’t live in a state that isn’t yet offering a homestead exemption. Or you may find that your state offers a senior freeze, but you make too much money to qualify. So you definitely want to investigate your own state, before you determine whether you will be able to put the brakes on paying property taxes.

Also Read– Social Security’s 2025 COLA Predictions Are Out, and Let’s Just Say Retirees May Not Be Jumping for Joy

But there are several factors you’ll want to keep in mind:

  • There are rules: Because these state programs are often but not always aimed at low-income seniors, it should come as no surprise that there are generally always going to be rules baked into these property tax exemptions, such as second homes or vacation homes not being eligible for a senior freeze.
  • You may just get a credit: Often these tax exemptions come in the form of a credit on property tax bills.
  • Only one homeowner may need to qualify: Don’t assume that both homeowners have to be the eligible age to participate in a senior freeze. You may be able to take advantage of the property tax exemption as long as one homeowner is the eligible age.
  • This may not just apply to homeownership: These senior freezes generally don’t only apply to houses. Often, if you’re 65 or older, you’ll be able to reduce your property tax bill not only on a house but mobile and manufactured homes, houseboats, townhomes, condominiums and so on.
  • You will have to apply: You typically need to apply for a senior freeze. You may not need to renew it every year, but generally, the first year you would have to apply for a property tax exemption. It likely won’t automatically be granted to you.
  • You’ll provide more information after applying: When you apply for a senior freeze, you’ll typically furnish your age and date of birth on the application. You may later need to provide, perhaps to a county auditor, documentation in the form of a driver’s license or birth certificate.

The senior freeze can be a good fit for many to cut down on property taxes that might prevent them from owning their homes during retirement. Just keep these rules in mind before deciding to apply.

Talk to a financial advisor today if you have questions about your taxes in retirement.

Also Read- Donald Trump Wants to Change Social Security Taxes

The Bottom Line 

Saving for retirement was hard and managing your money while retired is even harder. If you are eligible for a homestead exemption for seniors in your state you may want to consider applying for one. You won’t get out of paying property taxes entirely but the senior freeze will stop property taxes in their tracks. You may want to sell your home someday for a variety of reasons but thanks to a property tax exemption, if you do move out it likely won’t be because property taxes were too high.

Tips for Retirement Planning

  • Retiring can be hard enough without having to worry about whether you have enough money or not. You may want to work with a financial advisor to help you create a retirement plan so that you don’t have to worry. You’ll be able to make long-term financial goals and get a roadmap on how to achieve those goals. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • You can also take advantage of SmartAsset’s free retirement calculator to help you determine if you’re saving enough to meet your long-term goals.
  • Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn’t at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks.
Source :
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

To Top