| Deferral of Special Assessments |
|
|
 |
|
|
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.
Program information
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) a $55 fee will be charged to your account for DOR to become a security interest holder, and
- Personal manufactured structures (land not included) do not qualify.
- The manufactured structure fee will be deferred.
To qualify
- If you are married and apply jointly with your spouse or registered domestic partner
(RDP), you both must be age 62 or older. If only one applicant is 62, you must apply as an individual. - All joint property owners, other than spouse, must be age 62.
- 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 $39,000 for the income tax year 2008. This includes taxable and nontaxable income, including Social Security and pensions.
- If you have filed for an income tax extension, attach copies of documentation (i.e., W-2s, 1099s, federal tax return, etc.).
- If, after your initial approval, DOR discovers additional information on your household income that was not included on your application, you may be disqualified from the program and receive a billing notice.
To 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.
Follow the instructions on page 9.
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.
Making payments on the account
Yes, you may make payments. 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 and manufactured structure fees.
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.
- The deferred taxes plus interest of 6 percent per year and fees must be paid by August 15 of the calendar year following one of the above events.
- If 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 DOR for information about your special assessment account balance. Contact the taxing district for the assessment balance.
Interest charges
The special assessments charged against your property are spread out over a period of time
(often 20 years). The taxing district will provide a schedule (amortization) that shows how each installment charge is computed. These installment charges include an interest charge by the taxing district.
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 Oregon Deferral of Special Assessment Deferral Program is different from the Oregon Property Tax Deferral for Disabled and Senior Citizens. If you qualify, you may apply to your county assessor for the Oregon Property Tax Deferral for Disabled and Senior Citizens 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. 09-09)
|
|
| |
|
|
