School taxes are part of the property taxes that you pay to your local tax authority. Many seniors wish to be exempt from paying school taxes as they’re on a fixed income and no longer have children in school. However, many people of all ages are in this same category. This is cause for the ongoing debate about whether seniors should receive an exemption on their taxes based on age and social status.
Do 55+ communities pay school taxes? It is tough to avoid paying property taxes if you own real estate in any area, whether it be an age-restricted community or not. School taxes are a part of your property taxes. So, yes. If you own a home in a 55+ neighborhood and you’re responsible for paying property taxes, you will be paying school taxes.
In saying that, each state offers individual exemptions and deferrals for several demographics, including seniors. Your city can even be different from the town next to you. You must research your specific local area to see if you’re eligible for a tax break. The government is not going to announce that to you. They expect you to do your homework.
What Kind Of Tax Break Do Seniors Get?
Property or homeownership means that you will be paying tax. The tax will apply to the school system, parks, roads, and municipalities. The charge is determined through the value that your home has assessed. Every state has guidelines that senior citizens can use to see if they qualify for various tax exemptions or deferrals.
The thing that you need to understand is that your local city, county, or state government responsible for taking the taxes will not inform you that you’re eligible for an exemption. If you are a senior who wants to take advantage of any tax breaks, you have to research to find where the exemptions and deferrals may apply to you and then apply for them.
That will mean going onto the websites for the tax agencies to look for the relief available in your area. You sure don’t want to be paying money out that you may not have to. Research can be time-consuming and perhaps frustrating, but worth the effort in the money you save. Some exemptions are related to:
- Age and/or Disability Status. Many states do offer exemptions and deferrals to the elderly and those who are disabled. It will help if you read when you’re researching to understand all the guidelines because there will be age, residency, and income restrictions.
Seniors trying to use a homestead exemption (see below) may only be able to defer these taxes until the house is sold. And it would be best if you never assumed what age the exemptions would kick in. Age 65 is not always the magic number, and the exemption may alter with each passing year.
If you have a disability, there will need to be proof of that shown before your approval for the exemption, the same as you would with Social Security.
- Energy Efficiency. Some states will give you exemptions for the installation of a renewable energy system. Anything from a geothermal heat pump to adding solar panels would be consistent with the energy incentive exemption.
When the property assessment is complete, the green improvements are excluded from the value of the real estate. Not only will these enhancements allow you to save money on your taxes, but they will provide energy efficiency, thereby saving on energy costs.
- Veteran Status. Several states will provide property tax exemptions to our military veterans in certain instances such as 1) the home is to be their prime residence 2) they served during a period of war 3) they received an honorable discharge
Some states will give veterans an exemption with no stipulation as to when they served, whether it was a time of war or peace, but some are specific to only disabled veterans. There may be additional requirements, such as income and residency length. Some states extend exemptions to widows or parents of the disabled veterans.
- Homestead exemption. An exemption known as the Homestead exemption will save you from paying on a part of the value of your home. There are individual states that will lump the Homestead break in with how much you earn along with other determining criteria. With some states, you need to apply every year. Every state is different with their guidelines.
How Do Tax Breaks For Seniors Affect States?
Tax exemptions and deferrals may appear to bring relief to the senior citizens, but it may also be advantageous to the states they’re living in, or is there more of a downside to these breaks?
Overall, tax breaks for the elderly are seen favorably. This positivity is because the exemptions are kept under the radar to avoid controversy from the public. Public officials hold the older generation in high esteem as do most of the American citizens.
A vast majority of the elderly population is dependent on their Medicare and Social Security, leaving them on an incredibly fixed income. A majority of people see seniors as a deserving community for public benefits.
The explanation is that ‘tax expenditures’ are what exemptions for the elderly are. These are said to ultimately benefit the rest of us in that they decrease the amount of taxes that we would otherwise have to pay in.
Exemptions for the elderly are the kind of benefit that you don’t see as compared to other social programs, such as welfare. Contrarily, welfare is visible spending that has much more controversy attached to it than the invisible tax exemption for seniors.
It seems like a whole the senior tax breaks are nothing but a positive as they keep the property taxes at a minimum for retirees who are on a fixed income with the state and local aggregate economy having stimulation in conjunction. The downside can be the possible shrinkage of revenue required by the state to finance care needed for the aging residents.
Seniors Paying School Taxes
Let’s put aside the argument that school taxes are a part of the property taxes, and you focus strictly on the schools. So, there may be many seniors who either have never had children or don’t have any grandchildren. But does this mean that they wouldn’t want to provide an excellent education for the next generation who is responsible for the world around them?
How would we continue to maintain the standard of education that we expect if our senior citizens wouldn’t help to fund that education?
Seniors make up a large portion of the population. If the parents of the children currently in school had to make up for the money that the seniors don’t contribute, those people would move to an area where that isn’t the case. And the homes in the areas where the exemptions applied would go down in value. It would be a vicious cycle.
Are Seniors the Only Age Bracket with Fixed Income?
When you think about it, almost everyone has a fixed income. Most working people know exactly the amount of their paycheck month-to-month. While those under retirement age may, in theory, have the ability to earn more by moving to a new job or taking on a second job, in reality – most of us have a certain number of dollars coming in and a certain number of dollars going out.
Taxes aren’t easy on anyone’s pocketbook, but when it comes to schools, we should all agree that this is an expenditure we all share as a society, no matter what our age, no matter whether or not we are parents.
Those of us without kids still want educated doctors taking care of us. We want educated politicians making decisions on our behalf in government. And we benefit from the many artists, chefs, writers, actors, lawyers, scientists and more who are schooled by public education.
When we support our educational system, we all win.
