How Much of a Tax Break Do Seniors Get for Property Tax?

Many baby boomers have a love-hate relationship with the thought of celebrating another birthday. While the wrinkles may multiple as seniors age, so do the benefits. Whether you are fortunate enough to enjoy an active retirement hopping from golf courses to cruise ships, or if you continue to work, you may be eligible for property tax breaks. Much depends on where your primary residence is located. Each of the 50 states provides older residents with some form of tax relief on property.

Taxation Process

If you are thinking about retiring, it is helpful to understand how property tax works. The primary function of each state is to determine a maximum market value rate for the assessor’s office. In turn, the local assessor determines the value of the property for tax purposes. These taxes generate revenue for the local area. The county you live in may also stipulate a tax reduction based on age.

State Qualifications

Individuals considering retirement may opt to select a location based on lower taxes. States differ in the way they treat senior property taxation relief. Factors such as age and specific income levels are considerations. Some states provide distinctive tax benefits to individuals who retire from military service. Disability and tax-filing status are other factors considered by various state laws. In some states, such as Missouri and Massachusetts, seniors who rent and meet specific qualifications may expect a tax credit. Tax laws do change, which is not always favorable for a seniors’ tax position. California recently suspended a property tax deferral program designed for seniors.

Homestead Exemptions

Many local governments opt to give seniors homestead tax credits that are beyond the state’s allowance. In Florida, various municipalities offer an additional $25,000 to $50,000 in a homestead exemption on a permanent residence to individuals age 65 or older that are income qualified. Georgia state law allows those 65 and over to claim an exemption on their residence and up to 10 acres of land if it surrounds the home. Additionally, Georgians age 62 or over may qualify for a floating inflation-proof homestead exemption from both the state and the county. This tax-relief vehicle benefits seniors whose residence has increased in appraised value by more than $10,000.

Tax Circuit Breakers

Some state governments protect aging homeowners by instituting regulations to prevent property taxes from causing an overloaded burden. Residents in Maine who qualify may receive a partial refund on property tax. Seniors in Maine, who live alone, qualify if their total household income does not exceed $14,669. The income cap for a senior living with a spouse or dependent is $18,199. The Illinois Department of Aging enacted a similar program by offering a property tax grant to qualifying senior citizens. This may include taxes paid on a nursing facility or mobile home.