Property taxes tend to rise over time, even when home values decline. In the year 2000, U.S. homeowners paid an estimated $247 billion in property taxes. By 2010, that figure had climbed to $476 billion even though the housing market hadn't yet recovered from its recent implosion.
If your property taxes have reached a point where you can no longer keep up with them, you can pursue a couple of options for relief. First, you can appeal your property taxes, which makes sense if you feel your home has been assessed at a higher value than what it's actually worth. Another avenue you might pursue is a property tax freeze.
A property tax freeze locks the amount of tax you're paying in place so you don't have to worry about an increase. Six states offer the ability to freeze your property taxes, so if you live where such a program exists, it pays to see if you're eligible for it.
Keep in mind that property tax freezes generally apply to older homeowners only -- those more likely to struggle to keep up with increases. Many seniors move to a fixed income when they retire, at which point property tax hikes become more burdensome. That's why these programs aren’t designed for younger homeowners.
That said, in some states -- namely, Connecticut, New Jersey, and Rhode Island -- you may be eligible to freeze your property taxes if you’re permanently disabled.
Eligibility for a property tax freeze
If you live in Connecticut, New Jersey, Oklahoma, Rhode Island, Tennessee, or Texas, you may be eligible to freeze your property taxes. Here's what the requirements look like:
|State||Age Requirement||Annual Income Limit|
|Connecticut||70 and older||No income limit|
|New Jersey||65 and older||$70,000|
|Oklahoma||65 and older||No income limit, but local governments may set limits on assets|
|Rhode Island||65 and older||$4,000|
|Tennessee||65 and older||Set by counties|
|Texas||65 and older||No income limit|
Other types of relief for homeowners in need
If your state doesn't allow property tax freezes, see if it offers a homestead exemption. A homestead exemption excludes part of your home's value from property taxes, making your property tax bill more manageable.
Additionally, some states offer a property assessment freeze, which prevents your home from being reassessed at a higher value over time. This is important because property taxes are a function of your local tax rate multiplied by your home's assessed value. Locking in the value helps you avoid an increased tax bill indirectly.
Oklahoma and Rhode Island have both a property tax freeze and an assessment freeze program in place. The rules and requirements are different, so you might qualify for one program but not the other.
Climbing property taxes can drive low-income earners and seniors out of their homes. If your property taxes have been going up in recent years, it pays to see if you’re eligible to freeze them. And if you’re not, explore other options for relief.
Although you’ll need to meet certain criteria for a homestead exemption or property assessment freeze, anyone can file a property tax appeal. If you’re tired of paying a fortune for the privilege of owning your home, it pays to go that route and see where it takes you.