Owner financing is an alternative to a using a mortgage lender or bank. (Photo: Pexels).
In 2000, Colorado voters approved a property tax exemption for qualified seniors (also known as the Senior Homestead Exemption) as a state constitutional amendment. The Colorado legislature makes a determination each year to see if the state budget allows for this discounted property tax program for seniors. Since 2000, there have only been a few years when the program was suspended due to budget shortfalls.
The property tax exemption does not happen automatically for eligible seniors. First of all, a senior needs to know about the program, then must apply for it through their county assessor’s website.
The information contained in this article comes from the Boulder County Assessor’s office. The exemption is statewide so each county across Colorado should have the same information on their websites.
The requirements for eligibility are quite simple:
1) The senior must be 65 years old by January 1 of the year of the application.
2) The senior needs to be the owner of record for the property and lived in it as a primary residence for 10 consecutive years before January 1.
The deadline to apply is July 15th of each year. If the senior qualifies, the exemption goes into effect for the tax year which is being applied for. The discount will first appear in the tax bill which 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 amount of $100,000 in actual value. The State of Colorado pays the property taxes on the exempted value.
The exemption remains in effect until the property is moved into a trust, LLC, or other legal entity; death of a spouse; or if 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 Tax prorations when selling
Because the Senior Property Tax Exemption is a discount for qualifying seniors, there can be confusion during a transaction when a senior sells their home. Often the property tax amount shown in the Multiple Listing Service (MLS) is at the discounted rate. Care should be taken to make sure a home buyer understands what the property taxes will be when the senior tax exemption no longer applies.
For the home closing, taxes are prorated to the lower “senior” amount and the home buyer gets the benefit of the lower tax rate until the end of the year that was prorated. At the start of the following year, however, property taxes will resume to the non-discounted amount.
Senior tax worker program
As a senior – in this case, 60 years of age or older – you can work off some of your property taxes through temporary employment with Boulder County. The senior must own property in Boulder County and live at the location where the taxes are due. The senior will be paid $12 an hour and can earn up to the amount of the county portion of the tax bill not exceeding $1,000.
Half of the senior’s paycheck is paid by the County Commissioner’s office and the other half by the hiring department within the county. The senior will receive a paycheck, subject to the regular tax withholding. The senior is responsible for paying their property taxes – on their own
– by the due date.
The application for the Senior Tax Worker program will be accepted for 2021 calendar year beginning Jan. 1. The deadline to apply is June 15th of each year.
For more information on any of these programs, you can visit the Boulder County Assessor website at bouldercountyassessor.org. From that website you can e-mail the assessor’s office with any questions.
By Duane Duggan. Duane 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, e-mail DuaneDuggan@boulderco.com, call 303.441.5611 or visit BoulderPropertyNetwork.com.