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A Modest Proposal to Help Seniors with Property Taxes


It’s no secret that property taxes are one of the most hated taxes. Even after you’ve paid for a piece of property in full, the taxes continue—making some people feel like they’re renting their homes from the government in perpetuity.

A key problem with this scenario is how the property tax inevitably increases over time. When a person takes out a loan to buy a home, usually the mortgage payment stays flat, but the property taxes continue going up. And, of course, when a person finishes paying that 30-year loan, the property tax continues to be owed. 

The earning potential for an individual in the middle of their career is much different than that of an older person who has been retired since age 65. Income drops and becomes fixed instead of steadily increasing. This leads to homeowners who are “house rich” and “cash poor.”

And this is where property taxes begin to really take their toll.

One policy idea to remedy this involves expanding the use of deferrals to help seniors. Here’s how it works: once a homeowner reaches a certain age, they can request that the county defer their property taxes. Instead of paying each year, the homeowner has a lien placed on their home and the property taxes come due (with interest) whenever the home is sold or ownership is transferred. 

This allows the homeowner to avoid being forced out of their home because of the strain of property taxes. When the home is sold or given to heirs, the payment of property taxes becomes part of the transaction.

It isn’t hard to see the similarities between a deferral and a reverse mortgage program. But seniors are often reluctant to engage in a reverse mortgage because they significantly eat into the equity of their property, unlike a property tax deferral. The equity that a homeowner has already built up would not be compromised in most cases by a deferral, because inflation and property value increases will outpace the amount of property tax that would accrue over the life of the deferral.

Counties in Utah are already authorized to use deferrals for property owners who are indigent, but at their own discretion. Utah should consider making deferrals available for anyone who meets the agreed upon age requirement.

Some would argue this is a better solution than simply freezing property taxes or eliminating property taxes for seniors since all other property owners don’t have to bear the weight of supporting someone who no longer pays property tax. Exemptions don’t typically lead to less revenue for government—it just shifts the overall burden to other property owners.

In the end, a deferral doesn’t subsidize anyone, but allows seniors to stay in the home they worked so hard to purchase and pay off.

Libertas Institute will continue to look into property tax solutions that help seniors enjoy their property in the twilight of their lives.

  • Jeremy Manning

    One thing to keep in mind is the difficulty and expense of verifying eligibility for a program like this. Many homes of elderly people are owned by trusts, llcs or other legal entities which don’t file death certificates. Counties would have to make sure that qualified home owners who apply for this program meet all requirements then they would have to have a way to be certain that deferrals were paid up when the elderly pass away. A simple property lien might not be enough. Extra work for counties means extra expense for tax payers.

    This may not be a bad idea but it isn’t simple.

    • Michael Melendez

      The trigger for payment of the deferral would not be the death of an individual, but the transfer of ownership of the property, a process the county would already be engaged in.

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