HomeMy WebLinkAbout7 -Senior Citizen Property Tax Deferral Application
Property Tax Division – Mail Station 3340 – St. Paul, MN 55146-3340
Senior Citizen Property Tax Deferral
Property Tax Fact Sheet 7 Fact Sheet
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This fact sheet is intended to help you become more familiar with Minnesota
tax laws and your rights and responsibilities under the laws. Nothing in this
fact sheet supersedes, alters, or otherwise changes any provisions of the tax
law, administrative rules, court decisions, or revenue notices. Alternative formats
available upon request.
www.revenue.state.mn.us
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Revised October 2015 Minnesota Revenue, Senior Citizen Property Tax Deferral
What is it?
Under the Senior Citizens’ Property Tax Deferral
program, you can defer on a portion of the property
taxes you owe if:
You are 65 years old or older
Your household income is $60,000 or less
The amount of property taxes that you will be re-
sponsible for paying will be 3% of your household
income.
How does it work?
This is a low-interest loan from the state. This is not
a tax forgiveness program. The state pays the county
your property taxes directly and charges you interest.
The interest on the loan changes yearly, but will
never be more than 5%.
Please note, under this program, a lien will attach
to your property. This means that the state can take
possession of your home as payment for the loan if
you leave the program or no longer qualify for the
program and you do not pay the loan amount back.
How much will I pay in taxes?
The amount of tax you pay is determined the year
you enter the program. Your annual income from the
year before you enter the program is used to figure
out how much you will pay.
Example: Let's assume your household income was
$15,000 the year before you entered the program and
under the program, you are responsible for 3% of
your household income.
3% of $15,000 is $450.
The maximum amount of property tax you
would be responsible for paying each year
you participate would be $450.
If your property tax for the year was $1,450, you
would pay $450, and the remaining $1,000 would be
paid by the state.
The $1,000 would be the amount of the loan from
the state and interest would be charged on it.
If your total property tax ever fell below your
maximum tax amount ($450 is this example), you
would only pay the amount due.
As part of your initial application, you will need to
provide a report detailing any mortgages, liens,
judgments, or unpaid property taxes on your
property. The report must be dated within 30 days of
your application. Depending on the type of property
you own, your report will be one of the following:
Abstract property: a licensed abstracter
must prepare a report showing the last deed
recorded and any unsatisfied liens or
judgments. This report is also called an
"Owners and Encumbrances" report.
Torrens property, you will need to obtain a
copy of the "Original Certificate of Title,"
sometimes called a "Condition of Register,"
from the County Recorder.
If you are unsure what type of property you have,
contact your county recorder.
The Senior Citizen Property Tax Deferral Program was established to help senior citizens who were having difficulty
paying their property taxes. This deferral program has two primary advantages for senior citizens.
1. It limits the maximum amount of property tax you pay to 3% of your total household income.
2. It provides predictability. The amount of tax you pay will stay the same as long as you remain in the program.
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Minnesota Revenue, Senior Citizen Property Tax Deferral
What about my property tax refunds?
When you apply for property tax refunds, you will
not receive the refunds as cash payments. They will
be applied to your deferred property tax total, which
is the loan amount from the state.
Your Minnesota income tax refunds, political
contribution refunds, or lottery winnings of any type
will also be applied to your deferred property tax.
What if my income changes?
If your income goes above $60,000 in a calendar
year, you must notify the Department of Revenue in
writing.
You will not be allowed to defer any further taxes
until your income is $60,000 or less. If this happens,
you are responsible for submitting a new application
for the program.
If you fail to notify the state of an increase in income,
penalties will apply.
Please note that stopping deferral because of excess
income is not the same thing as being terminated
from the program.
Who may be eligible?
In order to qualify for this program, all of the
following conditions must be met:
1. The property must be owned and homesteaded
by a person 65 years of age or older. (In the case
of a married couple, one spouse must be at least
65, and the other spouse must be at least 62.)
2. Your total household income cannot be more
than $60,000 for the calendar year before the
year of your initial application.
3. One of the homeowners must have owned and
lived in the home for at least 15 years before the
year that you submit your first application.
4. There can be no state or federal tax liens or
judgment liens on the property.
5. The total of unpaid debts secured by mortgages
and other liens against the property cannot be
more than 75% of the assessors estimated market
value of the property.
How do I apply?
Applications are available at your County Auditor's
office.
Applications are due on or before July 1 to defer a
portion of the taxes you owe for the next year. You
can apply the year you turn 65 years old, but you will
not receive a deferral until the following year.
Once you are enrolled in the program and continue to
meet requirements (annual income is $60,000 or
less), you do not need to reapply.
What else should I know?
If you meet the requirements of this program, the
state will file a notice of lien with your county. If
there are fees associated with this filing, they will be
added to your deferred tax.
When does my enrollment end?
Deferral of taxes will terminate when any one of the
following occurs:
1. The property is sold or transferred.
2. All qualifying homeowners die.
3. The homeowner notifies the Commissioner
of Revenue in writing that he/she wishes to
discontinue the program.
4. The property no longer qualifies as a
homestead.
When terminated, the deferred property taxes, any
special assessments that may have been deferred,
penalties, plus any recording or filing fees will
become due and you will need to pay this to the state.
If the property is sold or the homeowner dies,
payment is due within 90 days of termination.
If the homeowner voluntarily leaves the program or
the property ceases to qualify as a homestead, the
total deferred amount will become due within 1 year
of termination.
No additional interest will be due if you pay the state
on time. If the deferral is not paid on time, penalty,
interest, lien, forfeiture, and other rules for the
collection of property taxes will apply.
What if I have questions?
This is only a summary of the Senior Citizens’
Property Tax Deferral program. For more
information, or for answers to specific questions, call
the Tax Operations Division of the Minnesota
Department of Revenue at: (651) 556-4803.
Last year’s total household income Parcel ID number from tax statement Year property was purchased
$
Estimated market value (from Notice Is property currently classified Year homestead was established
of Real Estate Value or tax statement) as homestead?
$ Yes No
Legal description of property (or you can attach a copy of your deed)Print or typeApplicant’s signature Date Daytime phone
Spouse’s signature Date Daytime phone
Your name Social Security number Date of birth
Spouse’s name Social Security number Date of birth
Mailing address
City State Zip code County
CR-SCD
Property Tax Deferral for Senior Citizens
The information on this application is correct to the best of my knowledge.
You must attach the following to this application:
1. A copy of this year’s property tax statement.
2. A report detailing any mortgages, liens or judgments on the property.
• For “Torrens” property, the report is a copy of the original certificate of title, which is available from your county
recorder (sometimes referred to as a “condition of register”). The certificate must be dated within 30 days of your
application.
• For abstract property, the report is prepared by a licensed abstracter showing the last deed recorded and any
unsatisfied liens or judgments (sometimes referred to as an “owners and encumbrances report”). The report must
be dated within 30 days of your application.
If you don’t know what kind of property you have, contact your county recorder.
Mail your completed application with the attachments listed above to:
Minnesota Revenue
Mail Station 4108
St. Paul, MN 55146-4108
(Rev. 11/13)
Important: Participation in this program is voluntary. If you participate, a tax lien will be placed on your property. This lien must
be satisfied when your property is sold. In the event of your death, your heirs must satisfy the lien before they can acquire clear
title. Read the instructions on the back carefully before completing this application.
Homeowners with a reverse mortgage do not qualify to participate in this program.Income/PropertySign here
About this program
This program allows people 65 or older
to defer a portion of their homestead
property taxes. The deferral begins with
real estate taxes payable the year after
you make the initial application.
Participation in this program is vol-untary.
There are some important facts you
should know before you apply.
• This is a loan from the state to you. The deferred tax is paid by the state to your county.
• Interest will be charged on the loan. The interest rate will be adjusted an-nually but will never exceed 5 percent.
• A lien will attach to the property.
• The county will send you a notice each year showing the current year’s deferred taxes, the total cumulative deferred taxes and accrued interest. This information becomes public data.
• The amount of property tax you pay each year will be based on your income the year before you enter the program.
Who qualifiesTo qualify, you must meet all of the fol-lowing requirements:
1. You must be 65 or older and own
and occupy the property as a home-
stead. If you’re married, your spouse
must be at least 62 when the first
deferral is granted.
2. Your total household income cannot
exceed $60,000 in the calendar year
prior to the year you apply.
3. At least one of the homeowners must
have owned and occupied the prop-
erty as their homestead for at least 15
years prior to the year of application.
4. There can be no state or federal tax
liens or judgment liens on the prop-
erty.
5. Total debts secured by mortgages
and other liens against the property
cannot exceed 75 percent of the
property’s estimated market value.
Homeowners with a reverse mortgage do not qualify to participate in this program.
When to apply
You must apply by July 1 in order for
your taxes to be deferred the follow-
ing year. You may apply in the year in
which you turn 65. Once enrolled in the
program, you don’t need to reapply.
If your income changes or
you want to stop deferral
If your income exceeds $60,000 in a cal-
endar year, you must notify us in writ-
ing by July 1 of the following year. You
won’t be able to defer additional taxes
until your income drops to $60,000 or
less, at which time you’ll need to send
a written request to resume deferral. If
you want to voluntarily stop deferral,
you must also send us a written notice.
Send notice to:
Minnesota RevenueMail Station 4108St. Paul, MN 55146-4108
Paying back the taxYour participation in the program will end when any one of the following oc-curs:
• The property is sold or transferred.
• All qualifying homeowners die.
• You notify the department in writing
to stop deferral.
• The property no longer qualifies as a
homestead.
When any of these happen, the deferred taxes plus interest must be paid back to the state. If the property is sold or the homeowner dies, payment is due within 90 days. If you voluntarily stop deferral or the property no longer qualifies as a homestead, you’ll have one year to pay back the amount.
If you pay back the tax within the above
time frames, you will not be charged
additional interest. The county will
record a notice of termination and send
a copy to you. You must pay any record-
ing or filing fees.
If you don’t pay back the tax on time, penalty, interest, lien, forfeiture and other rules for collecting property taxes will apply.
How this program affects
refunds and rebates
You can apply for property tax refunds
or rebates based on the qualifying
amount on your property tax statement.
You will not, however, receive property tax refunds or rebates as cash payments. You will also not receive Minnesota in-come tax refunds, political contribution refunds or lottery winnings of any type. Instead, these refunds will be applied to reduce your deferred property tax total.
We’ll notify you whenever we use a re-
fund to reduce the amount of deferred
tax. If your refund exceeds the deferred
amount, we’ll send you a check for the
difference.
How we use information
Some of the information on this appli-
cation is private data. We use the infor-
mation to determine your eligibility. To
verify information, we may share it with
the county assessor, the county attor-
ney, and federal, state or local taxing au-
thorities. You’re not required to provide
the information we ask for; however, if
you don’t, you won’t be considered for
the program.
Penalties
You’ll be charged a penalty equal to
20 percent of the deferred tax if the in-
formation on your application, property
certificate or abstract report is false; or
if you don’t notify us that your income
exceeds program limits. If you inten-
tionally give us false information on any
of the above, the penalty increases to 50
percent of the deferred tax.
Questions?
If you need help completing this appli-
cation, call (651) 556-4803.
TTY: Call 711 for Minnesota Relay.
We’ll provide this information in other formats upon request to persons with disabilities.
From CR-SCD Instructions