Finances, Home Care

How the California Senior Property Tax Postponement Supports Aging at Home in the Bay Area

A home isn’t just something you buy; it’s something you build. We don’t mean that you have to craft a house with your hands, but the process of turning a set of walls and pipes and wires into a true home is a project that takes time: indeed, it even begins to represent time, becoming saturated in memories. For too many Bay Area aging adults, though, that home can go away if they can’t afford property taxes. In San Francisco, the average housing property tax is nearly $5000 a year. When incomes shrink due to the pressures of medical bills, dependency, and the loss of income, houses can become too expensive to afford. Older adults who don’t own their homes outright can face the risks of having to move, often to group or nursing homes, denying them the right to age at home with dignity and independence. But, thanks to an update to California law, that might change. Last September, IOA hosted a press conference with Betty Yee, California State Controller and Carmen Chu, Assessor-Recorder for the City and County of San Francisco, proudly announcing the reinstatement of the Property Tax Postponement Act, allowing eligible seniors the ability to postpone paying taxes on their property. With these costs reduced, more and more older adults will be able to take advantage of the ability to live at home, with all the benefits that confers. If you’re eligible, or think that an aging loved one might be, you should learn more about this plan. Filling out paperwork could be the key to continued independence.

Who Is Eligible for Property Tax Postponement

The postponement isn’t open for everyone. But it is open for the people who need it the most. According to the California State Controller, the program is available to:

People who are over 62, as well as those who are blind or disabled
People who own and occupy their primary place of residence
Homeowners with at least 40% equity in the property
Those who do not have a reverse mortgage on their property.
Anyone with a household income of $35,000 or under

That last category is more common than people think. A recent study by the Kaiser Foundation revealed that 20% of California older adults live below the poverty line of $16,000 a year. But that stat is broad, and poverty rate isn’t absolute. In the Bay Area, which is the most expensive region in the country to live, people can be above the poverty line and still struggle to make ends meet. For aging adults and their loved ones, that can be a particularly scary situation. There are people who find workarounds and alternate living situations, such as moving in with children, becoming, as they say, the new “boomerang generation”. Other options involve dramatically downsizing to try to find affordable living in the Bay Area. Of course, with the average one-bedroom apartment in San Francisco costing $3600 a month, that isn’t an option for many people. That leads some older adults to look for low-income housing. There are many appealing low-income options in the Bay Area but, again, moving costs can be prohibitively high. And, even more than actual fiduciary costs, there are emotional ones. You or your loved one may have built their life in one house. Children were raised. Arguments were had, as was making up. Lives were built. The impetus to stay is worth everything. Unfortunately, that doesn’t always pay the bills. That’s why this program is so important. Of course, it’s important to note that this is a postponement, and not an absolution. The taxes, with 7% interest per year, will have to be paid back when the homeowner:

Moves, sells the property, or transfers the title
Defaults on a senior lien
Obtains a reverse mortgage
Refinances
Passes away.

After death, the house would either need to be sold to pay the back taxes, or whoever is given the home will need to have money put aside to cover this cost. Taking advantage of this program means planning carefully so that a sudden bill after a life change doesn’t come as a shock. No big financial decisions should be taken lightly, but this is one that, if planned for correctly, can have a great benefit for older adults and their loved ones.

What Aging at Home Can Mean

Aging in place, in a home full of memories, can be a great blessing. It can help an older adult feel independent, and with that feeling comes a sense of liveliness and exploration. Being surrounded by your own four walls, in the home you’ve built, in the life you’ve chosen, can have a huge psychological benefit. At IOA, we know that aging means starting another phase in the unbroken continuity of life. And while moving, whether it’s to an apartment or a grass-roofed beachfront shack, can be great, staying in the home you know can be wonderful as well. Having to move when you don’t want to, simply because you had to retire, can rob someone of their dignity, and even worse, their spirit. With the reinstatement of the Senior Tax Postponement Act, that possibly doesn’t have to be the case anymore. So if you or a loved one are eligible, we encourage you to apply. Here is more information on the program, and here are the applications. Please let everyone you know who might need this. With more information spread, we can help people live and age at home, with independence, extra income, and the continued sense of exploration that drove their lives. If you’re unsure how to best support your loved one aging at home, Institute on Aging offers a wide range of programs, services, and online resources. Get in touch with us today to learn more.]]>