Q. Our property taxes are due soon and we worry that we may not be able to pay them, as my wife and I had large care expenses this year. Are there any programs that we might turn to for help?
A. Yes. California lawmakers have reinstated a program called the “Senior Citizens and Disabled Citizens Property Tax Postponement (PTP) Program” to provide property tax relief, in the form of a deferment, for qualifying seniors over age 62 and for persons with a disability.
Background: The program was originally created in 1976 and operated successfully for approximately 32 years until it was suspended in 2009 due to state budget cuts. During that interim, it helped approximately 6000 seniors and persons with disabilities remain in their homes, while generating an estimated $41 million in revenue for the state General Fund. More recently, and with strong bipartisan support and the approval of the governor, the program was reinstated and revised.
How it Works: The PTP operates as a loan program. To qualify, an applicant must meet the following five conditions: (1) Be age 62 or older on or before December 31, 2016, or be blind or disabled at the time of application; (2) Must own and occupy the home as his/her principal residence; (3) Have total household income which did not exceed $35,500 for calendar year 2015; (4) Have equity in the home of at least 40% of the home’s fair market value; and (5) There must not be a Reverse Mortgage on the home. The application filing period begins October 1, 2016 and runs through February 10, 2017. Since there is limited funding for the program, applications are processed on a first-come first-served basis.
Once approved, the State Controller’s Office will offer a loan to the applicant at 7% simple interest, place a lien on the home to secure the loan, and will then pay the current property tax to the applicant’s County. The loan will be due when the applicant moves from the property, sells or transfers the home, dies (unless a spouse or other qualified individual continues to reside in the home), falls delinquent on future property taxes or other senior liens, or upon refinancing or placing a Reverse Mortgage on the property.
Unfortunately, the program cannot be used to pay for any delinquent or defaulted property taxes. Further, if an applicant wishes to use the program in following years, he or she must reapply and re-establish eligibility each succeeding year. The program is intended to be self-funding, with succeeding years’ loan pool supported by fees and repayments collected from prior loans. So, securing the loan in the first year does not necessarily assure that a loan will be available in succeeding years.
Yet for seniors and persons with a disability in need of property tax deferment, it is a program well worth considering. The application can be for all or part of the tax due. Loans are processed in the order received, and since the application period just opened on October 1, 2016, I advise applying immediately. For an application or for more information, call the State Controller at 1-800-952-5661, or visit the Controller’s website.