Tax Aids and Credits

Other Local Government Payments - Senior Property Tax Deferral Reimbursement

Statewide Outcome(s):

Senior Property Tax Deferral Reimbursement supports the following statewide outcome(s).

Strong and stable families and communities.

Context:

For some taxpayers, property taxes account for a relatively high share of income.

The Senior Citizens Property Tax Deferral Program is a voluntary program which allows eligible senior citizens to postpone paying – or defer – a portion of their homestead property taxes and special assessments. Passed in 1997 and effective for taxes payable in 1999 and following years, the state reimburses counties for the amount of property taxes deferred each year.

Funding Source: State General Fund.

Strategies:

Provide a state reimbursement to counties for property tax deferrals granted to qualified homeowners age 65 or older who have owned and occupied their home for at least 15 years and have household income less than $60,000.

Qualifying homeowners can defer the portion of property taxes above three percent of their income. The state reimburses counties annually for the full amount of property taxes deferred. A homestead may remain eligible for deferral until a qualifying homeowner no longer resides in the property, at which point the payment of deferred taxes and interest becomes payable to the state.

Results:

Senior citizens are able to afford the property tax costs of staying in their homes by deferring the amount above three percent of their income.

Performance Measures Notes:

Number of taxpayers enrolled compares calendar year 2009 (previous) to 2011 (current).

As the baby boomer generation continues to reach retirement age, participation in the senior property tax deferral program is expected to continue increasing.

The average amount of property taxes deferred for 2011 was approximately $3,800.

For additional information, visit the Revenue Department (http://www.revenue.state.mn.us/Pages/default.aspx) website and search ‘senior deferral’.