Need some relief from property tax bills? If you are a homeowner in California and over 62, blind, and/or disabled, you may qualify for the Property Tax Postponement Program.
(NOTE: If you are a military veteran with a service-connected disability, read about the Disabled Veterans’ Property Tax Exemption.)
Eligible homeowners can postpone payment of current-year property taxes on their primary residence. Postponed amounts are secured by a lien against the property, and accrue interest at a rate of 7%.
Am I Eligible for Property Tax Postponement?
To qualify for property tax postponement for the 2017-2018 fiscal year, you must meet ALL of these requirements:
- Be at least 62 years of age on or before December 31, 2017, OR blind or disabled at the time of the application. If you are disabled, your disability must be expected to last for a continuous period of at least 12 months. All other recorded owners except your spouse, registered domestic partner, and direct-line relatives must also meet this requirement. Direct-line relatives are the parents, children, or grandchildren of you and your spouse, and the spouses of these direct-line relatives.
- Own and occupy the property as your principal place of residence – mobile homes are not eligible
- Have a total household income of $35,500 or less – includes the income of all persons who lived in your home during 2016, except minors, full-time students, and renters
- Have at least 40% equity in the property – the total amount of liens, mortgages, or other encumbrances against the property cannot exceed 60% of its fair market value
- Must not have a reverse mortgage on the property. (Read my article about Reverse Mortgages.)
Per state law, the property tax postponement program cannot pay for any delinquent and/or defaulted property taxes. These taxes are your responsibility to pay. The amount of defaulted property taxes owed will be considered in determining the amount of equity interest in the property.
Funding is limited and distributed on a first come, first served basis. Due to funding limitations, all who qualify may not be approved.
How do I Apply for a Property Tax Postponement?
You may only file an application during the filing period, for the current fiscal year. You must file a new application for every year that you wish to postpone your taxes.
To apply for the 2017-2018 fiscal year, which runs from July 1, 2017 through June 30, 2018, submit your application during the filing period, between October 2017 and early February 2018.
Applications will be processed in the order received beginning October 1, 2017. If your application is approved, the State Controller’s Office will notify you via U.S. mail and pay your property tax bill directly the County.
Complete the property tax postponement application, which will be available from the State Controller’s Office website, add all of the required documentation listed on the application, and mail to:
California State Controller’s Office Property Tax Postponement Program
P.O. Box 942850
Sacramento, CA 94250-0001
Future Tax Bills
Be sure you pay your property tax bill on time! Until your postponement application is approved, you are responsible for paying your bill on time. If you are late, you are responsible for any fees, interest, or penalties the county may assess. The property tax installment due dates are December 10 and April 10 of each fiscal year, which runs from July through June of the following year.
If your application is approved after you or your lender have already paid your current-year’s property taxes, the amount of the duplicate payment will be refunded to the program and applied to your account. (The State Controller’s Office unsuccessfully attempted to amend the law to allow duplicate payments to be refunded to the applicant by the county.) This is why you should apply to the program as early as possible, beginning in October, in case you can get your application approved before the first installment is due on December 10.
If you or your lender pays a property tax bill after the property tax program has already paid on your behalf, the duplicate payment will be refunded to whoever made the payment (either you or your lender).
Property Tax Postponement Lien
To secure repayment of the postponed property taxes, the State Controller’s Office records a lien against the property. The lien remains until the account is paid in full.
The interest rate is 7% per annum. The interest accrues until all postponed property taxes are repaid to the State Controller’s Office. Interest on postponed property taxes is computed monthly on a simple interest basis (the annual interest rate divided by 12, applied to the outstanding principal amount only). The interest is added to the amount of the postponement lien.
For example, for every $1000 of taxes postponed, you will be charged $70 per year.
When Do I Have to Pay this Back?
You may pay all or part of the balance to the State Controller’s Officer at any time. However, all postponed property taxes and interest become immediately due and payable if you do any of the following:
- Move from the qualified property
- Sell or convey title to the home
- Die without a spouse, registered domestic partner, or other qualified individual who continues to reside in the home
- Allow future property taxes or other senior liens to become delinquent
- Refinance the residential dwelling, or elect to participate in a reverse mortgage
You may make full or partial payments on your account at any time. Payments are applied first toward accumulated interest, and then toward the outstanding principal balance, which is the total postponed tax amount. Mail your check payable to the California State Controller’s Office to:
California State Controller’s Office Departmental Accounting Office – PTP
P.O. Box 942580
Sacramento, CA 94250-0001
For More Information
For more information about the Property Tax Postponement Program, call the State Controller’s Office at (800) 952-5661, or send an e-mail to firstname.lastname@example.org. You can also check the information posted on the State Controller’s Office website (select Financial Reports, Taxes, and Economy, then Property Tax Postponement). They accept written inquiries sent to: P.O. Box 942850, Sacramento, CA 94250-0001.
Remember: apply for the Property Tax Postponement program in early October! Funds are limited and available on a first come, first served basis. Qualified applicants will be denied if and when the funds run out. If you apply and get accepted early enough, the program can pay the first property tax installment, normally due on December 10.
Want more information about property tax calculation? Read my Property Tax Calculation article to learn about how property taxes are billed and collected.
If you are a military veteran with a service-connected disability, please check out my article about the Disabled Veterans’ Property Tax Exemption.
As always, contact me with any questions.