Property Tax Deferrals Provide Relief For Some Homeowners

January 20, 2010

With the Monday, Feb. 1 deadline for paying 2009 property taxes without penalty or interest rapidly approaching, some homeowners may be able to postpone or “defer” tax payments.

According to the Harris County Appraisal District, Texas law permits a homeowner who is 65 or older or disabled to defer payment of current and delinquent property taxes on a homestead until he or she no longer owns or occupies the home as a residence.

For purposes of the law, a person is considered disabled if he or she receives disability insurance benefits under Social Security.  In some cases, the deferral will also extend to the surviving spouse of a person who claims a deferral, provided the spouse is 55 or older and the property is the residence of both spouses at the time the spouse who qualified for the deferral dies.

While taxes continue to accrue, Harris County Chief Appraiser Jim Robinson said, the deferral will help avoid penalties and interest, as well as possible foreclosure.

“Property taxes continue to accrue during the deferral period, and all unpaid taxes are assessed interest at the rate of 8 percent per year,” Robinson.  “However, once an over-65 or disability deferral has been granted, additional charges can’t be levied for delinquent tax penalty and interest, and the property cannot be foreclosed upon for unpaid taxes during the deferral period.”

Robinson added the downside of a deferral is that it only postpones the taxes that must be paid.

“Individuals who plan to leave their home to heirs or to sell it need to be aware that a deferral doesn’t eliminate property taxes for eligible homeowners, but merely postpones when the taxes must be paid.  Also, those who have a mortgage on their home should check with the mortgage company to make certain the deferral doesn’t violate the terms of the deed of trust securing the mortgage on the property,” Robinson stressed.

In addition to an over-65 deferral, a limited form of deferral may be available to a smaller group of homeowners, whose appraised value increased by more than 5 percent from 2008 to 2009, excluding any improvements made to the home.  Under this provision, taxes must be paid before delinquency on any increase in value up to 5 percent.  Taxes on the remaining amount of increase may then be deferred on terms similar to those for the over-65 or disability deferrals.

Robinson suggested that before attempting to use this provision, homeowners should first contact the taxing units in which their property is located to determine how much tax can be legally deferred.  He also recommended caution be used if the home has a mortgage since the deed of trust may permit the mortgage company to foreclose if all taxes aren’t paid on time.

Application for the 5 percent deferral for 2009 taxes must be made no later than Feb. 1.

Homeowners who qualify for an over-65 or disabled person’s deferral may claim the deferral at any time by filing a deferral affidavit form with the appraisal district.  If a delinquent tax suit is already pending, a copy of the affidavit must be filed with the court.

InstantNewsWestu Staff

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