Did you know there are three different opportunities in Colorado and Boulder County available for seniors to ease the burden of property tax payments on real estate?
Senior Tax Deferral Program
First is the senior tax deferral program. This is a program offered by the State of Colorado that enables you to postpone the payment of your property taxes until you sell the property, or even until your death when 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 is 3.125%. Also, there are eligibility requirements, so you will need 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 approval. If approved, you have the option of deferring either the entire amount of your taxes or half of the taxes.
Eligibility Requirements for Application
To apply, you must be 65 years old on or before January 1 of the year you are applying. You cannot receive income from the property by renting it out as it must be your primary residence, but you can maintain a home office. If the property is owned a trust, you must be the trustee and beneficiary of the trust. Lastly, if you have a reverse mortgage, you likely will not be able to defer your taxes as the lender is required submit a subordination agreement with the application.
Timing
Oops! It is too late to apply this year, but you can start planning ahead for next year. The deadline for application delivery to the treasurer’s office was March 22, 2019. 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: bouldercounty.org/property-and-land/treasurer/taxes/property-tax-deferral/application-request.
To be ready to get the application filled out, 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
Senior Homestead Exemption (Discounted Property Tax Program
for Seniors)
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 requirements for eligibility are quite simple:
The senior must be 65 years old by January 1 of the year of the application.
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 that is being applied 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 amount of $100,000 in actual value. The State of Colorado pays the property taxes on the exempted value.
Exceptions to ownership and occupancy requirements include: if a property is owned by a trust, corporate partnership, or legal entity; the applicant or spouse is or was living in a nursing home, hospital, or assisted living facility; the residence was condemned or destroyed by a natural disaster; or homeowner passed away prior to January 1. In the event of deeding the property into a trust, the trustee can re-apply. A surviving spouse can also re-apply in the event of the death of a spouse.
For more information about the senior tax exemption, visit the Boulder County Assessor website at: bouldercounty.org/departments/assessor.
Senior Homestead Tax Prorations When Selling
Because the Senior Property Tax Exemption is a discount for qualifying seniors, there can be confusion when a senior sells their home. Oftentimes 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 would resume to the non-discounted amount.
To learn more about property tax prorations, see my article at: boulderco.com/blog/property-tax-prorations-at-closings.html.
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 $11.10 per hour and can earn up to the amount of the county portion of the tax bill not to exceed $1,000.
Jobs range from office work including bookkeeping and administrative tasks to child care, forestry, teaching, construction, and more. Half of the salary will be paid by the Boulder County Commissioner’s Office and half by the hiring department within the county. The senior will receive a paycheck, subject to regular withholding. The senior will be 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 Commissioner’s Office website and the deadline to apply is June 15th of each year: bouldercounty.org/jobs/senior-tax-worker-program/
There you have it – three avenues to help seniors with their property taxes!
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By Duane Duggan, RE/MAX of Boulder. 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 Duane at DuaneDuggan@boulderco.com, call 303.441.5611 or visit boulderco.com.