| Deferral of Special Assessments |
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As a senior citizen, you can “borrow” to pay for public improvements that are charged against your property. The state will make the payments for those who qualify. All payments, plus interest, must be repaid.
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.
How does deferral work?
If you qualify for the deferral program, the State of Oregon will make the installment payments to the taxing district for you.
The payments will be charged to an account that establishes a lien against your property. The money, plus interest, must be paid back when you move, sell the property, change ownership, or die. The interest rate is 6 percent per year.
This program allows you to live on your property as long as you wish without making special assessment payments. You may apply to defer present and future assessments. If you have any past due assessments, you also may defer those (including interest or penalty you owe).
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 that shows how each installment charge is computed. These installment charges include an interest charge by the taxing district. The department will make the installment payments on your behalf, and charge an additional 6 percent annual interest on each installment payment made.
Do I qualify?
To qualify for the deferral program:
- You must be 62 or older at the time you file the application.
- You must have a recorded deed to the property or be buying the property under a recorded sales contract. Certain trustor-trustee arrangements qualify for deferral. You are not eligible for deferral if you have only a life estate interest in the property. Your homestead is limited to your principal dwelling and the tax lot where it is located.
- You must live on the property (except for an individual required to be absent by reason of health).
- Your total household income must be less than $36,500 for the 2006 income tax year. Household income is defined as both taxable and nontaxable income, including Social Security and pensions.
- If the property is owned by two or more persons, not husband and wife, each owner must:
• Apply,
• Live on the property,
• Be 62 or older, and
• Have combined household income of less than $36,500 for the 2006
income tax year. How do I apply?
Apply for the deferral between October 1 and December 1 at the taxing district office that billed you for the improvement.
The application must include a certified copy of the installment agreement. If your payments are delinquent and you want the state to pay them, the delinquent amount must be shown on the application.
When filing your application for deferral, you must attach the following:
• Copy of property tax statement or printout for the previous year.
• Income worksheet (included with application).
• Copy of ownership document if your property is a manufactured structure
(personal manufactured structures do not qualify).
• Copy of doctor’s statement if you are not living on the property due to
medical reasons. The taxing district bonding officer will send your application to the Oregon Department of Revenue. If the department approves your application, the state will pay your special assessment installments for you as long as the property qualifies.
Can payments be made on the deferred account?
Yes. You may pay all or part of your deferral account and still continue to defer current and future 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 Oregon Department of Revenue would otherwise pay on your behalf. Also, relatives or friends may make payments on your account if you do not object.
When are deferred assessments due?
All deferred assessment payments plus interest become due on August 15 the calendar year after any of these events occur:
• The person who claimed the deferral dies.
• The ownership of the property changes.
• The person who claimed the deferral no longer lives on the property
(except when required to be absent for health reasons).
However, if the person who deferred the payment dies or is disqualified, that person’s spouse may continue the deferral if the survivor:
• Was 59½ years old or older when the disqualification occurred,
• Meets other qualifications, and
• Applies by August 15 of the next year.
If heirs inherit the property and make it their principal residence by August 15 of the following year, a repayment schedule may be arranged with the Oregon Department of Revenue.
Call the Department of Revenue for information about your deferred account balance. Call your taxing district for the assessment balance.
Special assessment accounts
Special assessment accounts accrue 6 percent simple interest each year. The interest is simple, meaning that the interest computes yearly against the deferred amounts. Deferral accounts do not accrue compound interest, which means interest is computed on previous interest in addition to the deferred amounts.
The example below shows deferred installment payments and the simple interest that accrues during that time.
Note: Installment payments are made each year on February 1 and August 1 to the taxing district.
Example of Payments and Interest
| Payment Date | Installment Amount Paid | Deferred Installment Running Balance | 6% Interest Accrual | | Feb 2008 | $300 | $300 | $9 | | Aug 2008 | $300 | $600 ($300 + $300) | $18 | | Feb 2009 | $300 | $900 ($600 + $300) | $27 | | Aug 2009 | $300 | $1,200 ($900 + $300) | $36 | | Feb 2010 | $300 | $1,500 ($1,200 + $300) | $45
| | Aug 2010 | $300
| $1,800 ($1,500 + $300) | $54 | | Feb 2011 | $300 | $2,100 ($1,800 + $300) | $63 | | Aug 2011 | $300 | $2,400 ($2,100 + $300) | $72 | | Feb 2012 | $300 | $2,700 ($2,400 + $300) | $81 | | Aug 2012 | $300 | $3,000 ($2,400 + $300) | $90 | | Total amount owed = $3,000 | $495 |
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. 10-07)
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