Help Is On the Way for Lower-Income Senior Homeowners
Source: AARP.org | June 30, 2005
As District property tax assessments skyrocket, many low-income seniors find themselves at risk of losing their homes.
The District Council has passed meaningful property tax relief for seniors as part of the Budget Support Act.
The tax measure, which was endorsed by AARP DC, allows residents age 65 and older with annual incomes of less than $50,000 to delay paying part of their property taxes until they sell or transfer their homes.
Originally introduced as the stand-alone Senior Citizen Real Property Tax Deferral Act by Council Members Jack Evens (D) and Carol Schwartz (R), the provision was supported by all 13 council members.
The provision will help low-income older homeowners who have found themselves in an untenable position as District property tax assessments have skyrocketed. Unable to keep up with their taxes, many are at risk of losing their homes.
"Our goal for this measure is to make sure that people don't have to move out of their homes because of their tax bills," said Mimi Castaldi, director of AARP DC.
Such displacement was a real and frightening possibility for Ward 1 resident Catherine Hill, who testified on behalf of the legislation in March.
"Like many seniors, I have limited finances—my only source of income is monthly Social Security benefits. That's why I got behind on property taxes and had a lawsuit filed against me to take away my legal right to my home.
I learned that in order to keep ownership, I would have to pay delinquent taxes plus 18% interest, attorney fees of more than $2,000, court costs, publication fees and more. The outstanding real property taxes were only $1,165.35 but before I could redeem my home, I would have to pay about $3,500.35."
If it were not for the assistance of the AARP Legal Counsel for the Elderly, Hill doesn't know how she would have been able to work out a reasonable settlement and keep her home.
Many others have not been so lucky. And with residential assessments expected to rise by 15 to 18% in 2005, the need for relief is only increasing. The tax deferral language included in the Budget Support Act provides that relief—and peace of mind.
The AARP-endorsed tax deferral measure differs from some other tax relief proposals in that it will assist the District's low-income senior homeowners without causing a permanent revenue loss to the District. The deferred taxes will ultimately be paid, with interest, when the property is transferred.
Before enactment, the District Budget Support Act must be approved by the U.S. Congress.
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