Residential property-tax refund and credit programs exist in nearly every state, but unfortunately few people know about them. These programs can help retirees and many other Americans by reducing their property taxes. Here’s what you should know.
Rising Property Taxes
Property taxes are a major source of income for local governments, but while they help fund key public services, they can be a financial drain for many homeowners, especially retirees, many of whom live on fixed incomes.
According to Attom Data Solutions, a property-data provider, the average American household payed $3,785 in property taxes in 2021, but this amount varies widely depending on your state’s tax rate and your home’s estimated value. For example, New Jersey residents paid $9,476 per year on average in 2021, while West Virginia residents paid $901.
To help ease this tax burden, most states offer several property-tax relief programs. But states aren’t always proactive in letting people know. It’s up to you, the homeowner, to find out what’s available in your county or city that you may be eligible for, and to apply.
Property tax relief programs, sometimes called exemptions, release eligible homeowners from paying some or all their property tax obligation. How long the exemption lasts can vary depending on where you live, and the reason you’re applying for the exemption.
The tax-relief process varies by county, city, or state. In general, you’ll have to meet certain eligibility requirements, apply and provide documents that support your request. Most programs will either reduce, waive, or freeze property taxes for seniors, veterans, surviving spouses, disabled and low-income residents.
But there are some counties that also offer basic homestead exemptions to homeowners regardless of age or income, and others that may provide exemptions to homeowners that have recently made energy-efficient improvements to their home.
Where to Look
The best way to learn about local property-tax relief programs and their eligibility requirements is to visit your county, city or state website that collects your property tax. Most of these sites also provide applications and instructions, and will allow you to apply either online, by mail or at your local tax office.
Another good resource for locating programs in your area is the Lincoln Institute, which has a property-tax database that lets you to browse programs across the country. To access it go to ResidentialPropertyTaxReliefPrograms.org.
Jim Miller publishes the Savvy Senior, a nationally syndicated column that offers advice for Boomers and Seniors.