Colorado Property Tax Breaks for Seniors

If you are a homeowner in Colorado and are age 65 or older, you may be eligible for a homestead exemption on your property taxes. And if your income is below a certain level, you could qualify for a rebate or deferral of your property taxes.

Homestead exemption for seniors

The Colorado homestead exemption for seniors exempts the first 50% of the market value from tax, up to a maximum reduction of $100,000. To qualify for the exemption, you must be at least 65 years of age as of January 1 of the year you apply; you must have been the owner of record of the property for at least 10 consecutive years, and you must occupy the property as your principal residence and must have done so for at least 10 consecutive years.

The exemption is available on only one property. Your principal residence for purposes of the exemption can be a house, condominium, apartment, room in a house, or a mobile home. You do not have to be the sole owner of the property in order to qualify for the exemption. You can own the home with your spouse or someone else. And you can also own a life estate in the property.

If you are a surviving spouse, you can also qualify for the exemption, even if you are not yet 65 years of age and the property is not in your name. You would qualify if your spouse passed away on or after January 1, 2009; your spouse met the requirements indicated above; occupied the property with you as your primary residence; and you currently occupy the property as your primary residence and you have not remarried.

How to apply

According to county tax assessors in Colorado, if you have previously applied and have been approved for the senior property tax exemption, you don’t need to take any further action – your initial application remains in effect.

If this is the first year you are applying for the exemption, you need to complete either the Short Form or the Long Form. The deadline for filing your initial application is July 15. Once your application is approved it remains in effect until there is a change in ownership. You don’t need to reapply each year.

You can use the Short Form if either you or your spouse meets all the requirements in terms of age, ownership and occupancy of your residence. You would use the Long Form if you are applying as a surviving spouse or if you qualify for any of the exceptions to the ownership and occupancy requirements. An exception would apply if ownership of your residence has been transferred to or purchased by a trust or other legal entity for estate planning purposes, either you as the qualifying senior or your spouse is confined to a health care facility, or your residence is condemned in an eminent domain proceeding.

You should present the completed application in person or mail it to your county assessor’s office. You can find the address, phone numbers and other information on each county government in Colorado on the Colorado Counties Inc. website.

State budget cuts

Due to Colorado state budget constraints, there are plans to reduce various different services in the state. According to an article in the Rocky Mountain News the homestead exemption is set to be suspended is fiscal years 2009-10 through 2011-12. The state legislature previously suspended this exemption back in 2003, but it was subsequently reinstated in tax year 2006.

Property tax deferral

If you are 65 or older, you may qualify to defer the payment of your property taxes. The Colorado State Treasury makes the tax payments to the county on your behalf, establishes a lien against your property, and charges interest on the amount of property taxes it pays for you. You would not have to pay back the amount owed until you sell the property or the mortgage changes hands.

To qualify for this property tax deferral you must be 65 or older, the cumulative amount of the deferred property taxes plus interest cannot be more than the market value of the property less any liens, you must own and occupy the home, all your property taxes for prior years must have been paid, your mortgage holder must agree that the state’s interest in the property has precedence, and you must not be earning any income.

In order to have your property taxes deferred under this program, you need to apply to your county treasurer by April 1 each year.

Property Tax/Rent/Heat Rebate Program

If you are 65 or older or disabled, or a surviving spouse age 58 or older, you could qualify for the Colorado Property Tax/Rent/Heat Rebate Program. You could receive a rebate of up to $600 on your property taxes and up to $192 on your heating expenses. These can be expenses you pay directly as a homeowner, or expenses you pay indirectly as part of your rent payments.

In addition to the age or disability requirement, you must reside in Colorado the entire year; you cannot be claimed as a dependent on another person’s federal income tax return; and your total income for the year must be less than $12,000 if you are single, or your combined income must be less than $15,700 if you are married. To claim this rebate you need to file Form 104 PTC.

Sources:
Debate rages over cuts to close state budget gap, by Ed Sealover – Rocky Mountain News
Senior Information – Douglas County Assessor
Senior Property Tax Homestead Exemption – Elbert County
Senior Property Tax Exemption – El Paso County Assessor
Senior Tax Deferral Information – Douglas County Assessor

Reference:

• Homestead law keeps $45,000 of equity safe from creditors, by Jim Flynn – gazette.com: www.gazette.com
• Property Tax Rebates and Deferrals for the Elderly and Disabled – Colorado Department of Revenue: www.colorado.gov
• Senior Property Homestead Exemption Information – Gunnison County Assessor: www.gunnisoncounty.org