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Property Tax Bills Are Out! Consider Senior Tax Deferral, Discount, and Work Program
Duane Duggan
By Duane Duggan, Realtor, RE/MAX of Boulder
Property tax bills just came out and are in every property owner’s mailbox, putting property taxes at the top of mind! As a reminder, property taxes may be paid in one single payment by April 30 or in two equal payments. If made in two payments, the first half-payment is due by the last day of February. The second half-payment is due by June 15th. If you have a loan and the lender is escrowing for taxes, the lender will be paying your taxes. If not, be sure to pay attention to the due dates.
Property values have risen substantially in Boulder County creating upward pressure on property taxes. This burden is especially noticed by seniors on fixed incomes trying to stay in their home.
Did you know there are three different opportunities in Colorado and Boulder County, available for seniors to ease the burden of the payment of property taxes on real estate?
1. Senior Tax Deferral Program
First, is the Property Tax Deferral Program for Seniors offered by the State of Colorado. It allows you to postpone the payment of your property taxes until you sell the property -- or even until your death -- and your estate can deal with it. Of course, there is a bit of a catch. Interest is applied and accrues on the deferred amount. In 2019, the interest rate was 3.125%. The 2020 interest rate has not yet been determined. Also, there are eligibility requirements, so you have to fill out an application for approval through the Boulder County Treasurer’s Office. The treasurer’s office sends the application to the State of Colorado for consideration for approval. If approved, you have the option of deferring the whole amount of your taxes, or half of the taxes.
Eligibility Requirements for Application
First, you need to be 65 years of age on or before January 1 of the year you are applying. Second, you can’t be receiving income from the property as in renting it out, but you can be maintaining a home office. Third, if the property is owned by a trust, you must be the trustee and beneficiary of the trust. Lastly, if you have a reverse mortgage you likely won’t be able to defer the taxes as the lender is required to subordinate to the tax referral.
Timing
The deadline for application delivery to the treasurer’s office is March 20, 2020. If you want to defer next year, start thinking about it in January and get your application in.
Making an Application
You can follow this link to start your application:
To be prepared to fill out the application, have the following ready:
- Your full name
- If the property is held in a trust, the name of the trust
- Property address
- Your date of birth
- Phone number
- Name of your mortgage company (if applicable)
- Approximate balance on your mortgage
- Whether or not you have a reverse mortgage
2. Senior Homestead Property Tax Exemption
The Colorado Legislature approved the senior homestead property tax exemption in 2000 as a Colorado constitutional amendment. The legislature makes a determination each year to see if the budget allows for such an exemption for seniors. Since 2000, there have only been two years that it was not allowed.
The exemption does not happen automatically for each senior. A senior, first of all, needs to know about the program, and then must apply for it through the Assessor’s Office website. The requirements to be eligible to apply are quite simple:
- The Senior must be 65 by January 1 of the year of the application.
- The only other requirement is that the Senior needs to have lived in and owned the home for 10 continuous years before applying.
The deadline to apply is July 15th of each year. The exemption goes into effect for the tax year that you are applying for. The discount will first appear in the tax bill that is sent in January of each year.
For those who qualify, 50% of the first $200,000 in actual value of their primary residence is exempted for a maximum exemption of $100,000 in actual value.
The exemption remains in effect until the property is moved into a trust, LLC, or other legal entity; death of a spouse; or the home is destroyed by a natural disaster. In the event of deeding the property into a trust, the trustee can reapply. The surviving spouse can also reapply in the event of the death of a spouse.
Senior Homestead Property Tax Prorations When Selling
Since the senior homestead property tax exemption is a discount only for seniors, there can be confusion when seniors sell their home. Often the property tax amount shown in the Multiple Listing Service (MLS) is the discounted rate. Care should be taken to make sure the buyer knows what the taxes will be when the senior tax exemption no longer applies.
For the closing, taxes are prorated on the lower “senior” amount and the buyer gets the benefit of the lower tax rate until the end of the year that was prorated. At the start of the next year, taxes resume to the non-discounted amount.
3. Senior Tax Worker Program
As a senior, in this case, 60 years of age or over, you can work off some of your property taxes through Boulder County’s Senior Tax Worker Program. The senior must own the property in Boulder County and live at the location where the taxes are due. The senior is paid $12 per hour and can earn up to the amount of the county portion of the tax bill not to exceed $1,000.
The “salary” is paid by the County Commissioner’s Office and by the hiring department within the county. The senior will receive a paycheck, subject to regular withholding. The senior is still responsible for paying their property taxes, on their own, by the due date.
The application for the Senior Tax Worker Program is available on the Boulder County Assessor’s Office website. The deadline to apply is June 15th of each year.
There you have it! Three different programs that can help offset your taxes.
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About Duane Duggan:
Duane Duggan has been a Realtor for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. He has been awarded two of the highest honors bestowed by RE/MAX International: The Lifetime Achievement Award and the Circle of Legends Award. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life.
For questions, email Duane
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