Your property tax bill is based on your home’s assessed value, which is completely separate from your income. Homeowners who have low incomes pay a higher percentage of their earnings in property taxes than those with higher incomes. People who become unemployed or disabled may find themselves suddenly unable to afford their property taxes. In order to ease the burden on lower-income residents, senior citizens and people with disabilities, numerous states have created circuit breaker programs.
What Is a Property Tax Circuit Breaker?
A circuit breaker is a form of relief designed to keep homeowners from paying too large a percentage of their income in property taxes. It gets its name because it works in a way that’s similar to how a circuit breaker in a house prevents an electrical overload.
States use circuit breakers to reduce the debt burden on people with limited resources. Providing targeted relief costs a state less than cutting taxes or increasing property tax exemptions across the board for all homeowners.
Who Is Eligible for a Circuit Breaker?
Types of relief and eligibility requirements vary from state to state. Circuit breakers are generally only available to people who have low incomes, are older or are disabled. In some states, if a person who qualifies for tax relief dies, that individual’s surviving spouse is eligible for tax relief.
Circuit breakers can work in a variety of ways, but they most commonly limit the percentage of a homeowner’s income that can go toward property taxes. Some states apply the same percentage across the board, while others have different percentage limits that apply to different income levels. In some states, eligibility is restricted based on a home’s assessed value or the owner’s assets.
State policies vary in terms of how much a property tax bill can be reduced. In some states, property tax circuit breakers are administered as a part of the income tax or property tax system. Other states have a separate process in which homeowners can apply for rebates.
Property tax relief isn’t just available at the state level. Some local governments offer their own forms of relief.
Do You Qualify for a Circuit Breaker?
If you have a low income and you’re struggling to pay your property taxes, help may be available, but you’ll have to ask for it. Many people who are eligible for property tax relief don’t apply because they’re not aware that circuit breakers even exist.
Contact your local tax office or visit its website to find out if property tax relief is available where you live, if you qualify and how to apply. If your state doesn’t have a circuit breaker, or if it does but you’re not eligible, you may qualify for some other form of assistance with your property taxes.
