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| The Over 65 Exemption – When is it Over?
It’s not uncommon for children of parents benefiting from the Over 65 exemption to live in the home. They may be taking care of their elderly parents, have just moved back to where their parents live or simply live at home for the convenience. But what happens to the Over 65 exemption when the parent passes away? Unfortunately, when the owner of the house receiving the Over 65 exemption dies, the exemption is no longer applicable to the surviving children who either still live in or inherit the home. The exemption is only applicable for the over 65 homeowner of record (or the surviving spouse who is 55 or older). To avoid penalties and interest, the appraisal district should be notified timely of the death of an owner of record. For various reasons, the county appraisal district may not reflect the change during the next tax assessment, but that doesn’t mean the new, younger homeowners/children get to keep benefiting from the exemption. When the county realizes their error, either through a name change, revised mailing address, public notice, or when the home is sold, the owner of record from the time the parent passes away until the time the exemption is revoked is responsible for the difference in back taxes plus penalties and interest. For example*, if the home is worth $100,000 but the Over 65 exemption is capped at $60,000 and the tax rate is three percent, the homeowner is only paying $1,800 per year in taxes ($60,000 x three percent). When the parent passes away, the home should then be taxed at the full $100,000 value. If a child continues to take advantage of the Over 65 exemption for three years after the parent passes away, that heir then becomes responsible for the taxes on $120,000 of assessed value ($40,000/year x three years). That equals $3,600 in back taxes ($120,000 x three percent), plus penalties and interest. The money “saved” by taking advantage of an improper exemption could end up costing thousands more than if the appraisal district were properly notified. * The actual cap value of the Over 65 exemption will vary by taxing jurisdiction. If you or your parents are over 65, contact O'Connor & Associates to learn more about the Over 65 exemption and how we can help you take advantage of this tax savings. Click here for FREE useful information to reduce your property taxes Questions? E-mail O'Connor & Associates, or call 1-877-4-TAXCUT. Please help us! We are conducting a survey to educate legislators regarding problems with the property tax appeal process. You can help by taking 2 minutes to complete this survey. You will receive a copy of the survey and FREE tips on how to appeal your property taxes. Click here to take our survey. » Hire O'Connor & Associates to reduce your property taxes. You pay NOTHING unless we save you money!  Please send me periodic tips on reducing my taxes. O'Connor & Associates -- Your Key to Real Estate Value Corporate Office: 2200 North Loop W., Suite 200 Houston, TX 77018 1-800-856-7325 Dallas * Houston * Los Angeles * Newport Beach If you would like to be removed from this list and receive no future real estate information, click here to unsubscribe. |
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