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Changes to the Property Tax Deferral Program

The Property Tax Deferral program has seen several changes in recent years. The biggest changes came in 2011 when the Oregon Legislature made changes due to the poor economy and weak housing market. Each year since 2011, the Legislature has continued to monitor the health of the program and make additional changes as necessary.

Below, are the Legislative changes, listed by year enacted, and how they affect deferral accounts and the Deferral Program.





2013 Changes (HB2510 and HB 2489)
Reverse mortgage extension extended (HB2489)
This law allows participants that were identified under HB4039 from 2012 to remain on the program until they either cancel from the program or disqualify from the program. To remain active on the program, participants will need to meet all eligibility requirements except for the reverse mortgage exclusion and they must recertify to the program every two years. A letter will be sent to those affected.

Reverse mortgage and Home occupancy rule waiver (HB2510)
Those participants who either have a reverse mortgage or have not owned and lived in their home more than five years and were active on the program prior to the changes in 2011 can reapply to have their taxes deferred. The first 700 approved applications, based on receipt at the local county assessor’s office will rejoin the program in 2014. All other eligibility requirements are still in effect.

Each year going forward, the number of approved applications under this waiver will be limited. Contact the Property Tax Deferral Unit for more information.





 

2012 Changes (HB 4039)

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.



 

2011 Changes (HB 2543)

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."


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.