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Seniors in Texas Can Defer Property Taxes, But Should They?

The Texas Tax Code, Section 33.06, allows taxpayers 65 years of age or older and homeowners with disabilities to defer property taxes on their primary residence homestead. But what does that really mean?

Are the taxes waived?

No, the taxes are not waived. They don’t go away. The tax deferral simply delays when the tax has to be paid. Instead of paying your property tax bill in January of each year, the taxes will be collected when the home is sold or transferred. Interest continues to accrue but the taxing authority won’t pursue collection activities.

How long does the deferral last?

A deferral ends when person who qualified the property for the deferral no longer owns the property as their residence homestead. This typically happens in one of two ways: 1) the home is sold, or 2) the home is inherited after the death of the last surviving qualified person. The deferral also terminates if the qualified person no longer occupies the property as their primary residence.

What happens when the deferral terminates?

When the deferral is terminated, the deferred taxes and accrued interest must be paid in full. There will be a tax lien on the property that will have to be paid when the home is sold in order for a clear title to be issued. If the home was inherited, the new owner will have until the 181st day after the date the qualified person no longer owns and occupies the property as their primary residence. After the 181st day, penalties will be assessed.

How does someone apply for a deferral?

To apply, the taxpayer simply needs to complete an affidavit and submit it to the local appraisal district. A list of Texas appraisal districts can be found on the Comptroller’s website.

Do I need to hire someone to help me?

In a word, No. You can complete and submit your form easily and the Comptroller’s office should be able to answer any questions you have.

The tax deferment, like a homestead or senior exemption, is available to qualified homeowners free of charge. The taxpayer should be able to complete the form and submit it easily. You don’t need to pay anyone to help you get tax deferrals or exemptions. Your local tax appraisal district should be able to answer any questions you might have.

If you get phone calls or letters stating that you owe delinquent taxes, please verify by checking with your local taxing authority. Even though the letters may seem official and the callers seem to have a lot of information about your property, they are often scams. Do not give out any information or pay money to anyone without checking out their claims first.

Is this a good option for most homeowners?

The best option, if you have the means, is to pay your property taxes on time every year. That will keep your heirs from owing a large sum of money upon your passing. But if you’re on a fixed income and have a smaller home (with a smaller tax bill), this might be a good option for you.

It is important to note, though, that you can apply for the deferral even if you don’t intend to use it. As long as you have the money, you can continue to pay your tax bill every year as usual. If you do have a bad year with large medical or home repair expenses, it will give you some leeway on getting that tax bill paid without collection efforts.

How do I find out more?

For more information about the state’s tax deferral program, visit https://www2.texasattorneygeneral.gov/seniors/investments-property or contact your local tax assessor/collector.

Senior Downsizing Experts provides this guide for informational purposes only and is not affiliated with any taxing authority. To verify information provided herein, please contact the state comptroller’s office or your local appraisal district.

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