What is property tax and how do you attain property tax relief? Let’s start with property tax; it’s a tax that’s placed on “real” property such as real estate, aircrafts or boats and must be paid by the owner of the property. The amount is usually determined by the value of the property in question. As for property tax relief, it can be defined as a refund or rebate that is provided by the government to property owners who pay taxes on their property. The purpose of property tax relief is to basically ease the financial burden placed upon citizens as a result of tax.
Participating States
Several states, including California, New Jersey and Pennsylvania have either passed legislation or established some form of property tax relief for their residents. For instance, taxpayers in California are provided with property tax relief in the event their properties are damaged or destroyed. In fact, the law not only applies to owners of real estate, but also to owners of business equipment, mobile homes, boats and aircrafts.
As part of the Fair and Immediate Relief plan, more than a million residents in New Jersey benefited in 2004 as a result of the increased property tax relief checks that were mailed out. In the same year, the governor of Pennsylvania signed the Homeowner Tax Relief Act into law. Under this law, residents of Pennsylvania are provided with property tax relief through revenue generated from gaming.
Property Tax Relief Programs
A lot of property tax relief programs serve to help senior citizens and low to middle-income families. It’s also important to note that property tax relief remedies vary from state to state, therefore the information that proceeds in this article may not necessarily apply to you depending on the state in which you reside in. However, the following property tax relief programs are generally conducive throughout the nation and typically involve certain eligibility requirements that are state sensitive:
- Homestead Deduction
- Senior Citizen or Disabled Property Owner Tax Relief
- First-Time Homebuyer Individual Income Tax Credit
- Individual Income Property Tax Credit
- Low-Income, Long-Term Homeowners Tax Credit
Homestead Deduction is a property tax relief benefit that has the potential to reduce your property’s assessed value by as much as $60,000 before calculating the yearly tax liability; however it’s limited to residential property only. In most cases, an application must be on file with the Office of Tax and Revenue.
When property owners are older; around 60-65 years of age or when they are disabled, they may be able to file an application for disabled or senior citizen property tax relief. The benefit of this program is that it can reduce a qualified property owner’s property tax by as much as 50 percent. One of the eligibility requirements for program qualification is that the disabled or senior citizen must own 50 percent or more of the property. In some states, federal tax credit is available to first-time homebuyers. Generally, credit can be claimed if the property was purchased during the tax year of the state you live in.
The Individual Income Tax Credit program can reduce individual income tax liability of qualified homeowners and renters by up to $750. The eligibility criterion is contingent upon total household income; it typically needs to be $20,000 or less. The Low-Income, Long-Term Homeowners Tax Credit program serves to ease the effect of rising assessments and taxes on low-income residents. One of the requirements that enable homeowners to receive this credit involves the time period of homeownership; usually, the property needs to be owned for at least 7 consecutive years for eligibility.
These property tax relief programs as well others that may be available in the state you live in can truly help ease any financial difficulties that may result from taxes.