© Afsar Estate Planning 2018

Property Tax Deferral In Place For 2018-2019 Tax Year

 

California lawmakers reinstated a program called the “Senior Citizens and Disabled Citizens Property Tax Postponement Program” to provide property tax relief, in the form of a deferment, for qualifying seniors over age 62 and for persons with a disability.   The program was originally created in 1976 and operated successfully for approximately 32 years until it was suspended in 2009 due to state budget cuts. During that interim, it helped approximately 6000 seniors and persons with disabilities remain in their homes, while generating an estimated $41 million in revenue for the state General Fund. More recently, and with strong bipartisan support and the approval of the governor, the program was reinstated and revised.

The Property Tax Postponement works as a loan program.

 

To qualify, an applicant must meet the following conditions:

  1.  Be age 62 or older on or before 12/31/16, or be blind or disabled at the time of application;

  2.  Must own and occupy the home as his/her principal residence;

  3.  Have total household income which did not exceed $35,500 for calendar year 2015;

  4.  Have equity in the home of at least 40% of the home’s fair market value; and

  5.   here must not be a Reverse Mortgage on the home.

 

The application filing period begins October 1, 2018 and runs through February 10, 2019.  Since there is limited funding for the program, applications are processed on a first-come first-served basis. Once approved, the State Controller’s Office will offer a loan to the applicant at 7% simple interest, place a lien on the home to secure the loan, and will then pay the current property tax to the applicant’s County.

The loan will be due when the applicant moves from the property, sells or transfers the home, dies (unless a spouse or other qualified individual continues to reside in the home), falls delinquent on future property taxes or other senior liens, or upon refinancing or placing a Reverse Mortgage on the property.

Unfortunately, the program cannot be used to pay for any delinquent or defaulted property taxes. Further, if an applicant wishes to use the program in following years, he or she must reapply and re-establish eligibility each succeeding year.  

 

The program is intended to be self-funding, with succeeding years’ loan pool supported by fees and repayments collected from prior loans. So, securing the loan in the first year does not necessarily assure that a loan will be available in succeeding years.  Yet for seniors and persons with a disability in need of property tax deferment, it is a program well worth considering. The application can be for all or part of tax due. Loans are processed in the order received, and since the application period will October 1, 2018, it is advisable to apply quickly.

Applications  for the 2018-19 tax year are now available. For more detailed information, please refer to the Fact Sheet or Frequently Asked Questions. For an application, call the Controller at 800-952-5661, go to the State Controller’s website or email them at postponement@sco.ca.gov if you want an application mailed to you.  

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