Property tax deferral allows temporary suspension of payment of property taxes, with repayment required at a later date. Eligibility criteria vary, and repayment plans typically involve interest and monthly payments. It is not the same as property tax forgiveness.
A property tax deferral is an opportunity to receive a temporary suspension of payment of property taxes to a government revenue agency. Depending on the structure of the deferral program, the deferral amount may be covered by funds provided by a state or other jurisdictional agency, with the understanding that the amount will be repaid at a later date. Most property tax deferral programs have qualifications that applicants must meet to be eligible for this type of property tax assistance, and must stay current on the payment plan to remain eligible for assistance. future.
It is important to note that a property tax deferral is not the same as a property tax forgiveness. With the latter, the taxpayer is granted a one-time exemption from paying all or part of the property taxes owed. Forgiveness plans do not include the obligation to pay the canceled obligation. By contrast, a property tax deferment requires repayment at some point in the future, usually with the help of some type of plan that allows the taxpayer to settle the deferral with monthly payments. Most plans will also require you to assess a small amount of interest on what is equivalent to a loan to cover the deferment.
The criteria for obtaining a property tax deferral generally involves factors such as age, health, or income level. In some jurisdictions, households with a certain amount of annual gross income may be eligible to participate in a deferral program. Other jurisdictions grant temporary deferrals to taxpayers past retirement age. In other situations, homeowners who have become disabled and live on a fixed income may also qualify for this type of assistance.
While property taxes may be assessed and paid to a local jurisdiction such as a municipality, county, or parish, it is not unusual for a property tax deferral program to be administered at the state or provincial level. A common structure involves the owner submitting a formal request for assistance to the agency charged with administering the funds set aside for deferrals and being accepted into the program. The agency then pays a set percentage of the property taxes owed, leaving the taxpayer as little as three percent of the assessment obligation. At that point, the agency and the taxpayer agree to a payment plan that will typically involve initiating payments to the agency several weeks or months after the payment to the tax assessor’s office has been remitted. Other plans defer payment until the property is sold at some point in the future or until the owner no longer qualifies to participate in the deferment plan.
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