Many people with a disability own or are buying their homes. They may have a hard time paying their property taxes which become due each year. Under Iowa law, people who get Supplemental Security Income (SSI), or State Supplemental Assistance (SSA), or live in a health care facility which is receiving payment from the Department of Human Services (DHS) for the person's care, can get their property taxes suspended. This means not having to pay property taxes until the property is sold or transferred to someone else, or until you are no longer getting SSI, SSA, or assistance for living in a health care facility.
How the Program Works
If you are an eligible taxpayer, which means that you get SSI, SSA, or get assistance for living in a health care facility, the county must suspend all property taxes. This includes more than ordinary property taxes. It includes special assessments, rates, charges, interest, fees and costs that might be assessed against your property. It also includes any taxes due at the time of the suspension.
In order to prove eligibility, you should get a Notice of Decision from the Department of Human Services. It will include a statement that you are eligible for property tax suspension. Take the Notice of Decision to your County Board of Supervisors in the county where the property is located. The Board will order the County Treasurer to suspend your taxes. If you do not have your Notice of Decision, contact the Department of Human Services and ask for a copy to use as proof of eligibility for the property tax suspension.
Other people (Besides persons who get SSI, SSA, or DHS assistance for living in a health care facility) can also ask for their property taxes to be suspended if they are unable to pay taxes due to age or illness. These property owners must make a request to the County Board of Supervisors and show they are unable to contribute to the public revenue (unable to pay taxes). The Board will decide whether to grant the request.
WARNING: If you have a regular mortgage or reverse mortgage on your home, you should not use the property tax suspension. Having your property taxes suspended breaks your mortgage agreement and could lead to having to repay your suspended taxes or face foreclosure. If you have a mortgage on your property, check with Iowa Legal Aid and your mortgage company before having your property taxes suspended
Under Iowa law a County Board of Supervisors can also decide to "abate" the property tax of someone whose property tax has been suspended. Abating the tax means to completely cancel the amount owed. The County Board of Supervisors would need to find that cancelling payment of property taxes was in the best interests of the public and the person making the request.
Tax Credits are Also Important
Elderly and disabled Iowans with low or moderate incomes also qualify for a special property tax credit for their homestead (which may include mobile homes on property which you own). You are eligible for the tax credit if you are at least 65 years old, or are totally disabled. This tax credit (which is in addition to the homestead tax credit) can reduce the property taxes owed. People whose taxes have been suspended should also apply for this tax credit. It will reduce the amount of taxes that build up while they are suspended.
To apply for this property tax credit, you must fill out an application and file it with the County Treasurer every year between January 1 and June 1. You can get the form from the County Treasurer or the Iowa Department of Revenue. How much of a tax credit you get depends on your income. The lower your income, the higher the percentage of your property taxes the credit will pay. The maximum is $1000.
Combining a Tax Credit and a Suspension
It is to your advantage to claim both a tax suspension and a tax credit. A tax suspension means the taxes will not have to be paid until the property is sold or otherwise transferred out of your name, or until you are no longer eligible for the suspension. The tax credit reduces the amount of taxes that must be paid when you transfer the property out of your name, or when the suspension stops.
Get Details If You Have Questions
If you think you qualify to have your property taxes suspended, contact your Board of Supervisors or County Treasurer, or your local Department of Human Services. If you have problems getting your taxes suspended or would like details about this, contact Iowa Legal Aid.
Iowa Legal Aid provides help to low-income Iowans.
To apply for help from Iowa Legal Aid:
- Call 800-532-1275.
- Iowans age 60 and over, call 800-992-8161.
- Apply online at iowalegalaid.org
If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer.” A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.
*As you read this information, remember this article is not a substitute for legal advice.