Seniors property tax deferral program

[MMMdude]

Some cities such as mine have a property tax deferral program.  Basically you can elect to not pay any of it until you A) sell the house or B) die.  They tack on a nominal interest rate on the balance owing - right now it's 2.7%.  It would seem a no-brainer to take advantage of this program, no?  Taxes on an average home here are about $3300 per year so not an insignificant amount.  Does your city have such a program and if so do you plan on taking advantage of it?

[SwordGuy]

My city has a senior discount on property tax.  We're applying for it.  (My wife qualifies, I don't yet qualify.)   Don't know whether we'll get 1/2 credit or full credit.

[TheAnonOne]

Some cities such as mine have a property tax deferral program.  Basically you can elect to not pay any of it until you A) sell the house or B) die.  They tack on a nominal interest rate on the balance owing - right now it's 2.7%.  It would seem a no-brainer to take advantage of this program, no?  Taxes on an average home here are about $3300 per year so not an insignificant amount.  Does your city have such a program and if so do you plan on taking advantage of it?

Seems like you may accumulate gigantic amounts of debt doing this... Though, you'll be dead.

I could just imagine someone doing this for 20 years, and going to sell the house in their very old age, having nothing left to show after they come take the 80k-100k in back taxes...

[seattlecyclone]

Our county has a partial exemption for seniors with a low enough income, and an interest-bearing deferral for seniors with a slightly higher income. I would certainly take the exemption if I qualify, but would think twice about the deferral.

[robartsd]

It partly depends on what your intentions are for your hosue after you pass. This is basically just a (limited) low interest reverse mortgage. In some cases it might be the right tool.

[slugline]

Wouldn't this be a close relative of the old question, "Should I pay my mortgage early?" 2.7% is a sparkling low rate. It would be very tempting to defer the tax payment and invest the money instead in pursuit of the arbitrage.

[partgypsy]

My mother started doing this, but she pays around 7-8K a year in property taxes. However the interest rate is higher (4-5%)
(she is definitely a low income senior). I don't think she should do it, or if she does, for a very limited time (1, 2 years) just to sell the house. She doesn't listen to any of my financial advice. She also has a heloc she is using as an atm as well.   

[choppingwood]

The interest rate here (Alberta) is 5%.  I would like to be in my house for 20 years after I turn 65. That makes for a lot of interest to disappear from the home equity by the time I leave. (I'm assuming Cdn mortality for women, which is 90+, so there would be some years in assisted living or long-term care.)

I see it as an option for my mid seventies, if my budget is really tight because of expenses related to aging in my home. And if my health is not holding out, I'll take advantage of it earlier.