If You Are on Social Security & You Own Rental Property Do You Have to Pay Property Taxes?

Rental properties are rarely exempt from taxes.
Rental properties are rarely exempt from taxes. (Image: Hemera Technologies/AbleStock.com/Getty Images)

Property taxes can be expensive and some homeowners can't easily afford them, especially if they are elderly or disabled and have limited income. In many states, such individuals may qualify for exemptions from property taxes. However, these exemptions are usually available for primary residences and don't apply to rental properties.

Social Security

Individuals usually collect Social Security benefits if they are disabled or elderly. Elderly individuals may receive Social Security retirement benefits, while disabled individuals who don't meet retirement age requirements may receive Social Security disability benefits. Some Social Security benefits, such as Supplemental Security Income, are only available to individuals who are disabled and have limited income and assets.

Property Taxes

County or municipal governments typically assess property taxes based on the value of your property. Property taxes are usually due twice each year. However, many homeowners pay toward property taxes each month when they make mortgage payments and the lender holds the funds in escrow until the county collects property taxes. Most homeowners qualify for a general homestead exemption, which reduces the value of the taxable property by a predetermined amount.

Additional Exemptions

Many states also offer additional exemptions to lower a property's taxable value. Approval for Social Security doesn't automatically qualify you for additional property tax exemptions in most states. However, if you qualify for Social Security because of your age or a disability, you may be able to apply for additional exemptions. Many states require that you also meet income-limit guidelines before you qualify for disability or age-based exemptions. In this case, your Social Security benefits will count toward your total annual income.

Primary Residence vs. Rental Property

Most property tax exemptions, including those for disabled or elderly individuals, only apply to a taxpayer's primary residence, or homestead. These exemptions exist to lower the tax liability of taxpayers with limited income. Because rental property typically generates income and doesn't qualify as your homestead, you won't be eligible for any property tax exemptions because of your age or physical condition.

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