Fewer property tax deferrals; reverse mortgage not allowed

In the next few days, Oregonians who applied for the Senior and Disabled Property Tax Deferral program in July will receive letters from the Department of Revenue. The letters tell them if the state will pay their property taxes in November.

The 2011 Legislature made significant changes to the program hit hard by the recession. The changes make it more difficult to qualify for the program but still provide property tax relief to those who do qualify.

The department received 7,200 applications in July. So far, 2,600 won’t qualify under the program’s new laws that go into effect September 29, 2011.

Bram Ekstrand, program manager, said the biggest reason people won’t qualify is because they have reverse mortgages, which are no longer allowed in the program. About 24 percent of applicants have reverse mortgages on their homes.

Reverse mortgages enable seniors to convert some of their property’s equity into cash. This decreases the equity in the home, jeopardizing the ability to pay back the deferred taxes when the property sells.

The Legislature created the property tax deferral program in the 1960s to help seniors-and later, people with disabilities-stay in their homes. As participants leave the program or sell their homes, they repay the deferred amount with interest.

In recent years, the weak housing market has taken a toll on the program’s funds.

“Repayments haven’t been as robust the past few years, and we get more applications every year,” Ekstrand said. “This forced the Legislature to make changes.”

For more information, visit www.oregon.gov/dor or call 503-378-4988 or 1-800-356-4222; TTY (hearing or speech impaired,1-800-886-7204; e-mail deferral.unit@state.or.us or contact the county assessor.

 

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