As a senior citizen, you can "borrow" from the state of Oregon to pay public improvements to the taxing district.
Oregon homeowners age 62 or older may defer payments on certain special assessments against their property. These are assessments by a city, county, sanitary district, or other taxing district for improvements such as paved streets, sidewalks, and sewers.
Past due payments may be deferred (including interest or penalty you may owe). Contact the taxing district regarding questions about past-due payments.
How does the program work?
If you qualify for the special assessment program, the Department of Revenue (DOR) will make the installment payments to the taxing district on February 1 and August 1. Also:
- Interest at 6 percent on the installments is deferred, and
- A lien will be placed on your property, and
- On real property manufactured structures (includes land) an additional $55 will be charged to your account for DOR to become a security interest holder, and
- Personal manufactured structures (land not included) do not qualify.
How do I qualify?
- You must be age 62 or older at the time you file the application.
- All joint property owners, other than spouse, must be age 62 at the time the application is filed.
- You must have a recorded deed to the property, or you must be buying the property under a recorded sales contract. You may have a revocable trust. You are not eligible if you have a life estate interest in the property. A life estate is when you live on the property, but do not own the property.
- You must live on the property; however, you may live away from the property because of medical reasons. You must send a medical statement on letterhead from your health care provider to DOR (the exact medical condition is not needed).
- Household income must be less than $37,500 for the income tax year 2007. This includes taxable and nontaxable income, including Social Security and pensions.
How do I apply?
First, read the information about the special assessment program to help you decide if you qualify. Obtain a Special Assessment application booklet from your taxing district or DOR's website, www.oregon.gov/DOR/SCD.
Following the instructions on page 9, complete and file the application provided in the booklet. Send your application to the taxing district office that billed you for the improvement after October 1 and by November 30.
The taxing district will mail your application to DOR. The department will notify you in writing if your application is approved or denied.
The application must include a certified copy of the installment agreement. The installment agreement is a contract between the applicant and the taxing district. If your payments are delinquent and you want the state to pay them, the delinquent amount must be shown on the application.
Can payments be made on the account?
Yes. You may pay all or part of your special assessment account and continue to defer current and future installment payments. However, if you still have a balance at the taxing district, you may want to send payments to the taxing district to reduce the billing amount that DOR would otherwise pay on your behalf. Others (relatives or friends) may also make payments on your account if you do not object.
Make your payments to DOR. Payments are applied first to accrued interest, and then to past deferred installments.
When the property is inherited and the heir makes the property their principal residence by August 15 of the following year, a repayment schedule may be arranged with DOR. Contact the Deferral Unit, 503-945-8348; fax, 503-945-8737; or e-mail, deferral.unit@state.or.us.
When are assessments due?
- When you sell the property or it changes ownership. Example: You deed your property to your children.
- When you move permanently from the property, unless it's because of medical reasons.
- When the applicant dies. If you are a surviving spouse, see below.
The deferred taxes, plus interest of 6 percent per year must be paid by August 15 of the calendar year following one of the above events. A repayment schedule may be arranged with DOR.
Contact DOR for information about your special assessment account balance. Contact the taxing district for the assessment balance.
Are you a surviving spouse?
You don't need to file a special assessment application if the following conditions apply:
- You and your spouse each qualified for the deferral. You both signed the original application as joint applicants, and you were each 62 years old at the time the original application was filed.
- You continue to meet the requirements of the special assessment program (see page 1).
Your deferral account will continue and DOR will pay your special assessment.
If the above conditions do not apply and you were 59½ or older at the time of the qualifying taxpayer's death, you must meet the special assessment requirements and file a special assessment application, even if you signed the original application. Once DOR approves your application, we will continue to pay your special assessment.
-or-
If you were younger than 59½ at the time of the qualifying taxpayer's death, you must file a special assessment application to keep the past installments deferred. File the application with your taxing district office by August 15 of the year following the taxpayer's death.
Your special assessment account balance remains deferred and interest on the past-deferred installments continues to accrue. By law, DOR cannot pay your future special assessment installments. You are responsible for paying all future installments to the taxing district.
When you reach age 62, you must file a new application with your taxing district office by August 15 to defer future special assessments. DOR will notify you in writing when your application is approved or denied.
Example of Payments and Interest
| Payment Date | Installment Amount Paid | Deferred Installment Running Balance | 6% Interest Accrual | | Feb 2009 | $300 | $300 | $9 | | Aug 2009 | $300 | $600 ($300 + $300) | $18 | | Feb 2010 | $300 | $900 ($600 + $300) | $27 | | Aug 2010 | $300 | $1,200 ($900 + $300) | $36 | | Feb 2011 | $300 | $1,500 ($1,200 + $300) | $45
| | Aug 2011 | $300
| $1,800 ($1,500 + $300) | $54 | | Feb 2012 | $300 | $2,100 ($1,800 + $300) | $63 | | Aug 2012 | $300 | $2,400 ($2,100 + $300) | $72 | | Feb 2013 | $300 | $2,700 ($2,400 + $300) | $81 | | Aug 2013 | $300 | $3,000 ($2,400 + $300) | $90 | | Total amount owed = $3,000 | $495 |
Accounts accrue 6 percent simple interest each year
Simple interest is different from the compounded interest that credit card accounts accrue. Simple interest means that the interest computes yearly against the deferred tax amounts. Compound interest means interest is computed using both the amount charged (deferred installments) and previous unpaid interest.
If you compare our 6-percent simple interest to 6-percent compounded interest charged by credit cards, the simple interest you pay would be significantly less.
The example above shows deferred installment payments and the simple interest that accrues during that time.
Property tax deferral program
The Senior Citizen Special Assessment Deferral Program is different than the Property Tax Deferral program for Disabled and Senior Citizens. If you qualify, you may apply to your county assessor for the Senior Deferral program to defer your property taxes by completing a separate application. Applications are only accepted between January 1 and April 15. For more information about tax deferral, write for the free information circular, Oregon Property Tax Deferral for Disabled and Senior Citizens, 150-490-675. You may also contact us at the telephone numbers and website listed below. The address is:
Publications
Oregon Department of Revenue
PO Box 14999
Salem OR 97309-0990
Taxpayer assistance
General tax information:
www.oregon.gov/DOR
Salem: 503-378-4988
Toll-free from Oregon prefix: 1-800-356-4222
Deferral Unit:
Phone:503-945-8348
Fax: 503-945-8737
E-mail: deferral.unit@state.or.us
Asistencia en español:
Salem: 503-378-4988
Gratis de prefijo de Oregon: 1-800-356-4222
TTY (hearing or speech impaired; machine only):
Salem: 503-945-8617
Toll-free from Oregon prefix: 1-800-886-7204
Americans with Disabilities Act (ADA): Call one of the help numbers for information in alternative formats.
150-491-647 (Rev. 10-08)
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