In 2005, AARP conducted a national study of homeowners over the age of 65 and found that only 31 percent of the respondents were aware of property tax relief programs available to them in their state and only 3 percent of these respondents had actually applied for relief. So you might ask, why are there so many older Americans not taking advantage of these valuable programs?
The hard truth is that people listen better than they research. In most transactions, you have a title company or a real estate agent that is steering the homeowner and advising them on the more common exemptions. Tax relief programs generally highlight areas that may be taboo in conventional transactions, such as income, age, overall assets and disabilities. Based on these factors, the closing and/or real estate agent may be less likely to broach the subject or may lack the detailed knowledge to communicate the options to a prospective client.
Today, 35 states offer tax relief programs and 15 others offer equivalent exemptions for older Americans. We recommend to our clients that they expand their closing process or implement a post-closing routine to include a road map to tax relief programs and other exemptions for each homeowner.
As an industry we may not be able to stop tax defaults, but with a little extra effort at the closing table we can help homeowners reduce their tax burden, which can only lead to fewer tax defaults and/or a reduction in the amount of funds advanced in tax default situations.
Property Tax Relief: A topic for the closing table?