Monday, January 23, 2006
For IMMEDIATE Release

Tax Deferral Available to Some Homeowners

Coldspring—With the Tuesday, January 31 deadline for paying 2005 property taxes without penalty or interest rapidly approaching, some homeowners may be able to postpone or “defer” tax payments.

Texas law permits a homeowner who is 65 or older or a disabled person to defer payment of current property taxes on the person’s residence homestead until he or she no longer owns or occupies the home as a residence. For purposes of this law, a person is considered disabled if he or she is under a disability for purposes of payment of disability insurance benefits under Federal Old-Age, Survivors, and Disability Insurance.

“Property taxes continue to accrue during the deferral period, and are assessed interest at the rate of 8% per year,” said Clayton Adams, the San Jacinto County Appraisal District’s chief appraiser. He noted, however, that once an over-65 or disability deferral has been granted, additional charges cannot be levied for delinquent penalty and interest.

“The downside of a deferral is that rather than eliminating property taxes, it merely postpones when the taxes must be paid,” the chief appraiser noted.

“Before applying for tax deferral, which is not the same thing as an over-65 or disability homestead exemption, people need to understand that the taxes and accrued interest will become due and payable in full at the time the homeowner dies, moves, or sells the property. Also, those who have an outstanding mortgage should check with their mortgage company to make certain the deferral doesn’t violate terms of the deed of trust,” Adams added.

Eligible homeowners in San Jacinto County may obtain a deferral by filing a deferral affidavit with the San Jacinto County Appraisal District at 99 Slade St in Coldspring. SJCAD will then notify each affected jurisdiction, such as the county, city, school district or other entity, that a tax deferral has been granted. If a suit to collect delinquent taxes is already pending on the property, the affidavit may be filed with the court in which the suit is pending as well as with SJCAD.

In addition to the over-65 and total disability deferrals, a limited form of deferral may be available to homeowners whose appraised value increased by more than 5% from 2004 to 2005, excluding any improvements made to the home. Under this provision, taxes must be paid before delinquency on any increase in value up to 5%. Taxes on the remaining amount of increase may then be deferred on terms similar to those for the over-65 or total disability deferral.

“Before using this provision, homeowners should first contact the tax offices for the jurisdictions in which their property is located to determine how much tax can legally be deferred,” the chief appraiser said.

Adams also recommended that caution be used if the home has a mortgage, since the deed of trust may permit the mortgage company to foreclose if all taxes aren’t paid on time.

Application for this deferral should be made no later than January 31, 2006, on a special affidavit form available from SJCAD. Over-65 and disabled homeowners should also ensure that they have applied for and received applicable homestead exemptions for over-65 and disabled homeowners. These exemptions can substantially reduce tax liability.

For additional information, homeowners may contact the appraisal district at 936-653-1450.