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Recent changes to the Property Tax Deferral Program
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The poor economy and weak housing market forced the 2011 Oregon Legislature to make many changes to the property tax deferral program.
These changes affected deferred property taxes the state paid beginning in November 2011.
We are taking several steps to bring the program—as affected by HB 4039 in the 2012 legislature—up-to-date. These steps include:
- Running a query for an account-by-account analysis.
- Identifying participants affected by the passage of HB 4039.
- Sending letters to all individuals affected by HB 4039 by the end of April.
- Coordinating with county tax collectors for
refunding any taxes that were paid by participants who are now eligible
for the program.
Did your reverse mortgage cause you to be ineligible for the Senior & Disabled Citizens Deferral program?
If so, we'll be contacting you by phone or mail by the end of April
to tell you how changes the 2012 Legislature made in February affect
you. We appreciate your patience while we work out the details.
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| 2012 Changes (HB 4039) |
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Reverse mortgage extension
This
law allows participants that were inactivated from the program in 2011
for the sole reason of having a reverse mortgage two additional years of
deferral (2011 and 2012).
The department will determine which
applicants are affected by this provision, and pay the 2011 and 2012
taxes to the counties on their behalf.
County median RMV
Further
defines "county median RMV" to include properties that are classified
as 1-0-1 pursuant to the rule adopted by the department under ORS
308.215.
Recertification
Requires the
department to recertify properties for deferral "not less than once
every three years" rather than once every two years.
Requires
participants to complete and return the recertification form within 65
days of notification from the department. Failure to comply with this
renders property ineligible for deferral for the following year.
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2011 Changes (HB 2543)
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Net worth
Your net worth limit is $500,000.
- Net
worth is the total of the current market value of all of your assets
minus any debts. It doesn't include the value of the home for which
you're claiming property tax deferral, the cash value of your life
insurance policies, or tangible personal property (vehicles, furniture,
appliances, clothing, etc.) that you own.
- Assets include:
- Real property (other than the property for deferral)
- Cash
- Checking and savings accounts
- Bonds
- Other investments minus any debts.
Income criteria
Your annual household income cannot be more than $39,500. This is a change from "adjusted gross income" to "household income."
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Home occupancy
You must own and
live in your home for at least five years as of April 15 of the year in
which you apply for the program, unless you had to live away from it for
health reasons.
Homeowner's insurance
You must show proof of homeowner's insurance that covers fire and other casualties. We need:
- Policy coverage amount
- Name of insurance company (not insurance agent)
- Policy number
Real Market Value
The real market value (RMV) of
your home (as shown on the prior year's property tax statement) is
limited to a certain percentage of the county median RMV. The limit
increases based on the number of years you have owned and lived in the
home.
Interest formula
Beginning November 2011, the 6-percent annual interest rate will change from simple interest to compound interest.
- This change doesn't affect the interest rate on property taxes we have paid or will pay before November 2011.
Re-certification
To remain in the
program, you must "re-certify" every two years. This means you must
re-apply for the program every other year and meet all of the
qualifications. If you don't re-certify or qualify, the state won't pay
your property taxes
Reverse mortgages
Properties with reverse mortgages don't qualify for the deferral program.
We
will continue to defer the past taxes we have paid (with applicable
interest) until the applicant dies or the property is sold.
Liens on properties owned by people with disabilities
Eliminates
90-percent lien limit on property owed by a person with a disability.
These liens will be treated like senior deferral liens.
Prorated payments
We won't prorate or make payments on your property taxes if your income exceeds the limit after you're enrolled in the program.
Eliminates 5-year extension for heirs to repay deferred taxes
There is no longer a five year extension for heirs to repay deferred taxes.
Special assessment program
Special assessments will be phased out as participants leave the program. We cannot accept new special assessment deferrals.
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