Ask an Attorney: Seniors may take advantage of property tax value freeze to save some money

Last month, we talked about a certain exemption that would allow qualifying widows/widowers and disabled persons to save some money on property taxes.

If you are a senior in Arizona, you might also save some money on property taxes by taking advantage of the property tax value freeze which was approved as Proposition 104 in November 2000.

This amendment to the Arizona Constitution provides for the freezing of the full cash valuation of homes owned by seniors who meet the following requirements:

At least one of the owners of the house must be 65 years of age at the time the application is filed.

The property must be the primary residence of the taxpayer.

For the purposes of the exemption, this means that the property must be occupied by the taxpayer for an aggregate of nine months of the calendar year.

Certain properties do not qualify, such as properties with over 10 acres of land.

The owner of the property must have both lived in and owned the house for at least two years prior to applying.

The total household income from all sources, including non-taxable income, cannot exceed $30,576 for individuals.

For jointly owned property, the maximum is $38,220.

If you meet all of the above requirements, then the valuation of the residence will remain fixed for a three-year period.

During last six months of the three-year period, the County Assessor should send you a renewal application. If you still qualify, you can renew for another three years at that time.

You should note that the freeze terminates if you sell the home, add new construction, or fail to continue to fulfil the eligibility requirements set forth above.

If you become ineligible for whatever reason, the County Assessor would determine the full cash value as of that date.

You should also be aware that although the full cash value will be frozen, the actual tax rates set by the Board of Supervisors for your area will not be frozen and the actual tax you pay can continue to fluctuate.

The application period runs from March 1 through Sept. 1, so if you feel you are eligible, you should apply by the end of this month.

However, before you do so, you should question whether or not you should try to take advantage of the freeze at this time.

Due to the slowdown in the housing market, property values are not exactly skyrocketing and the assessed values for some properties may even decrease.

If you apply for the freeze and it is granted, you are stuck with the value of your property for three years, regardless of whether it might have otherwise decreased during that term.

In other words, the freeze can work against you in a declining value market.

You can at least determine whether the freeze would be a good idea for 2009.

Your 2008 property valuation will set forth the 2009 value.

If it is lower than the 2008 value, then you definitely do not want to apply for the freeze this year.

Andy Heideman’s column appears as a public service. It is not intended as legal advice and addresses only general

propositions. If you have a question about a matter that affects you, contact an attorney. If you have a question to ask Heideman for this column, call his Green Valley office at 625-4404 or e-mail him at aheideman@ duffieldlaw.com.