Homestead Tax Deferral Changes
Laws Change for Homeowners Disabled or Age 65
For homeowners who are disabled or age 65 or older, the laws just got easier to receive a tax deferral on their homestead taxes. Effective September 1, 2003, these homeowners may defer their taxes even if the taxes are not delinquent. The law also provides that the surviving spouse age 55 or older may retain the tax deferral when the qualified homeowner dies.
House Bill 3504 amended Tax Code Section 33.06(a), (b) and (c) and added Subsections (c-1) and (f) concerning the deferral or abatement of taxes on a residence homestead by an elderly or disabled person.
No delinquency required
Where prior law required a sworn affidavit that the taxes were delinquent on the homestead, the new provisions allow the homeowner “to defer the collection of a tax, abate a suit to collect a delinquent tax, or abate a sale to foreclose a tax lien ...”
So, homeowners who are 65 years of age or older or who are disabled as defined by Tax Code Section 11.13(m) may defer their taxes at any time. They do not have to wait for a first month of delinquency, with penalty and interest added.
A tax deferral only postpones paying the taxes; it doesn’t cancel them. After the homestead’s taxes go delinquent, interest accrues at 8 percent a year. Once the home is no longer owned or lived in by the qualified individual, the taxing unit can proceed to collect the taxes, with one exception.
The law now extends the tax deferral to the surviving spouse of an individual who deferred the taxes on the homestead.
To continue the tax deferral, the surviving spouse must be 55 years of age or older and the property was the surviving spouse’s residence homestead when the deceased spouse died.
The bill provides that the residence homestead may not be sold at a sale to foreclose the tax lien until the 181st day after the date the individual (or surviving spouse) no longer owns and occupies the property as a residence homestead. Prior law allowed the taxing unit to foreclose on the tax lien after the 91st day.
Abating a tax sale
The new provisions in Section 33.06 also outline how a person who has a pending sale to foreclose on the homestead’s tax lien may abate that sale. The homeowner (or agent) must deliver an affidavit to (1) the chief appraiser of each appraisal district that appraises the property, (2) the collector for the taxing unit that requested the order of sale or (3) the attorney representing the taxing unit for collecting delinquent taxes. The homeowner also delivers the affidavit to the officer charged with selling the property.
The homeowner must deliver the affidavit no later than the fifth day before the date of the sale. The affidavit must state that the individual is 65 years of age or older or is disabled as defined by Tax Code Section 11.13(m) and that the taxes are imposed against property that the individual owns and occupies as a residence homestead.
After the homeowner delivers the affidavit, the homestead may not be sold until the 181st day the individual no longer owns or occupies the property as a residence homestead. If the officer in charge of the sale sells the property in violation of this abatement, then the property owner may file a motion to set aside the sale under the same cause number and in the same court that issued the judgment to sell the property. The owner must file the motion during the applicable redemption period for the property. If the taxing unit receives the property, the owner must file within the 180th day following the date the taxing unit’s deed is filed of record.
Amended model form
The Comptroller’s prescribed Form No. 50-126 has changed to reflect these new Section 33.06 provisions. This affidavit form is one that the individual may use to abate a pending sale and for the surviving spouse to continue the tax deferral.
The surviving spouse would sign the original notarized tax deferral filed by the deceased spouse to continue to receive the tax deferral. The appraisal district may request that the surviving spouse show proof of age. At this same time, the surviving spouse also should file a homestead exemption application to continue to receive those homestead exemptions that the deceased spouse received.
For questions about Section 33.06 or the amended form, contact Technical Assistance at the Comptroller’s Property Tax Division by e-mail at firstname.lastname@example.org or by calling 1-800-252-9121, option 2. In Austin, call 512/305-9999.