Living on a fixed income after retirement is difficult for many retirees and seniors as expenses increase. If you have your own house, then it can get tougher because you have property tax to deal with, too. Here is what you need to know about senior tax breaks for retirees.

Property tax
Property tax is calculated based on the value of your property. Property taxes vary depending on the state you are located in; they are imposed at state and county levels. This is why property tax rules can vary. The same county can have different property tax rules in different cities. Therefore, senior tax breaks for retirees depend on the location.

Exemptions
If you want to understand senior tax breaks for retirees for property tax, then you need to understand how property tax is calculated firstly. Property tax starts with a property assessment and varies from state to state. You will receive the value assessment of the property and thereafter the property tax. The value of your property can be calculated based on the cost method, sales comparison, or the income method.

Once the property assessment is done, it is multiplied with the local tax rate called mill rate, which is 1/10 of one cent. However, depending on the state, the mill rate can differ. When we talk about property tax exemptions, it refers to the reduction in the home’s value that will then get taxed. The exemptions don’t affect the tax rate. Depending on the state, you can get senior tax breaks for retirees as percentages or dollar amounts.

Usually, many states enable you to combine your exemptions. This is because you might be eligible for more than one type of property tax. Moreover, there is a possibility that you can get tax breaks by combining property tax exemption for seniors and other partial exemptions.

Eligibility
If you want to avail senior tax breaks for retirees, you need to be 65 years or older in most states. In some states, if you are married and have joint ownership of the property, one of you must be 65 years or older. Depending on the state, the age at which you are eligible for exemption might differ. Washington requires you to be 61 or older to get an exemption. In some states, such as New York, you can get a tax break even if your spouse has passed away.

Apart from age, how long you have owned the property determines the tax as well. In most states, you are required to live in the house to get a property tax exemption. However, there are income limits that can affect your exemption. Other factors, such as the location of the property, can affect how much property tax needs to be paid.

The best places for property taxes are New Mexico, Delaware, Idaho, North Dakota, Indiana, Missouri, and Utah. The not-so-ideal places for senior tax breaks for retirees, when it comes to property taxes, are Illinois and Boston. However, remember that the rules for property tax change. Moreover, many other factors are taken into consideration so the exemptions may vary.