What is the senior citizen property tax deferral program and how does it work?
The senior citizen property tax deferral program is somewhat akin to a loan because the state pays the deferred tax to the county. In turn, the state attaches a lien to the property, maintains an account on the total amount of deferred taxes, and charges a floating rate of interest, not to exceed five percent, which is also deferred. The annual tax paid by the owner is restricted to three percent of the total household income based upon the income earned in the calendar year prior to the first year of enrollment in the program. This tax amount serves as a basis for how much must be paid annually for as long as the property remains in the program. The deferred tax is the difference between the total tax levied against the property and the tax amount paid by the owner. The summation of the total deferred taxes along with the interest that has accrued is what must be paid back to the state when participation in the program ends.
