California Property Tax Postponement Program

Quick Facts

• Benefit type: State-funded loan program that pays your current-year property taxes and records a lien against your home. You repay when you sell, transfer, or refinance the property.
• Eligible populations: California homeowners who are at least 62, blind, or disabled, with household income of $55,500 or less and at least 40% equity.
• Interest rate: Simple interest of 5% per year accrues on postponed amounts. Interest stops accruing once the balance is repaid.
• Application window: October 1 through February 10 for the following fiscal year taxes. Late applications are not accepted.
• Payment mechanics: The State Controller’s Office (SCO) issues payment directly to the county tax collector. Homeowners continue to receive tax bills but see the postponement reflected as a paid amount.

Program Overview

California resurrected the Property Tax Postponement (PTP) Program in 2016 after a budget suspension during the Great Recession. Designed for seniors and people with disabilities on modest incomes, the program prevents tax delinquencies that could lead to foreclosure. Rather than forgiving taxes, the state advances the payment and records a lien, allowing homeowners to defer taxes until they have cash—typically when they sell or transfer the property, or upon the homeowner’s death.

The program differs from exemptions or credits. You remain responsible for the postponed taxes plus 5% simple interest, which can accumulate over time. However, for homeowners whose income is fixed and who expect to remain in their homes for several years, the PTP program provides a critical bridge that preserves homeownership and credit. Because the program imposes strict eligibility criteria, detailed preparation is essential.

Eligibility Requirements

Age, Blindness, or Disability

• Age 62 or older by December 31 of the application year qualifies you based on age.
• Individuals who are legally blind or disabled as defined by Social Security may qualify regardless of age. Provide medical certification or SSA award letters.

Ownership and Occupancy

• You must own and occupy the home as your primary residence. Eligible property types include single-family homes, condominiums, cooperative housing, and mobile homes affixed to real property.
• The property must not be subject to a reverse mortgage. Home equity lines of credit are allowed if total liens do not exceed 60% of market value.

Equity and Liens

• You need at least 40% equity in the property, meaning that total liens (mortgage, HELOC, other encumbrances, and existing PTP liens) cannot exceed 60% of the property’s market value.
• Applicants must provide a current mortgage statement and property valuation estimate (such as an appraisal, broker price opinion, or county assessment) to document equity.

Income Limits

• Household income, including Social Security, pensions, wages, rental income, and investment returns, must be $55,500 or less. Income is calculated for all residents of the home, not just the applicant.
• The SCO may request federal tax returns, SSA-1099s, and other proof. Non-filers complete an income certification form.

Property Tax Status

• All prior-year property taxes must be paid. The program postpones only current-year taxes. If you are delinquent, you must bring accounts current before applying.

Application Process

1. Request the application package: Download from the SCO website or call (800) 952-5661 to receive Form BOE-8016-PTP and the checklist.
2. Compile documents: Gather proof of age or disability, income statements, mortgage payoff amounts, homeowner’s insurance declarations, and a recent property tax bill.
3. Calculate equity: Use fair market value minus outstanding liens to demonstrate 40% equity. Include all deeds of trust and liens on the property.
4. Complete Form BOE-8016-PTP: Provide property information, household member details, income sources, and signatures. If the property is in a trust, include trust documents granting you lifetime occupancy.
5. Submit between October 1 and February 10: Mail or deliver to the SCO with all supporting documents and a non-refundable $40 application fee (check or money order). Applications are processed in the order received.
6. Respond to follow-up inquiries: SCO analysts may request additional documentation, such as insurance coverage amounts or mortgage statements. Respond promptly; missing information can result in denial.
7. Receive approval and confirmation: If approved, SCO issues payment to the county treasurer and sends you a confirmation letter showing the amount postponed and the interest rate.

Managing the Loan

• Interest accrues at 5% simple interest, not compounded. For example, if you postpone $5,000, interest accrues at $250 per year until repayment.
• Annual renewals: Approved applicants receive renewal forms each fall. You must confirm ongoing eligibility, income, and lien balances. Failure to renew results in the program paying only the first year.
• Repayment triggers: Selling, refinancing, or transferring the property, or the death of the participant, triggers repayment of principal plus interest. Heirs have time to settle the account before interest penalty accrues beyond 5%.
• Voluntary repayment: You can pay down or pay off the postponed amount at any time without penalty. Contact the SCO for a payoff quote.

Documentation Checklist

• Completed and signed Form BOE-8016-PTP.
• Proof of age (driver’s license, state ID) or disability (SSA award letter, physician certification).
• Federal tax return or income certification form.
• SSA-1099, pension 1099-R, statements of wages, dividends, rental income.
• Mortgage statements showing outstanding balances.
• Homeowner’s insurance declaration page (must show hazard insurance in force).
• Copy of the property deed or trust instrument.
• Most recent property tax bill.
• Property valuation evidence (appraisal, market analysis, or assessor’s value).

Strategies for Success

1. Apply early in the window: Funds are limited by annual appropriations. Submitting in October increases the chance of approval before funds run out.
2. Maintain hazard insurance: The state requires proof of insurance to protect its lien. Ensure coverage does not lapse.
3. Monitor equity: Rising mortgage balances or new liens can push you below the 40% equity requirement. Avoid new loans that increase total encumbrances.
4. Plan for repayment: Discuss with heirs and estate planners how the lien will be satisfied. Consider setting aside life insurance or savings to cover the balance.
5. Combine with other relief: Pair postponement with property tax exemptions (senior, disabled veteran) to reduce the amount you need to postpone.

Common Pitfalls

• Missing the application window: The SCO cannot accept late applications. Mark your calendar for October 1 and prepare documents in advance.
• Reverse mortgages: Properties with reverse mortgages are ineligible because equity is already pledged. If considering a reverse mortgage, weigh the trade-off with PTP eligibility.
• Incomplete packages: Missing signatures, absent income proof, or outdated mortgage statements cause delays or denials. Use the SCO checklist before mailing.
• Insurance lapses: If your homeowner’s insurance lapses, the SCO can demand immediate repayment. Maintain coverage and provide updated proof each year.
• Forgetting annual renewals: You must requalify each year. Failure to submit the renewal means taxes will not be postponed in subsequent years.

Frequently Asked Questions

Does the program cover supplemental or special assessment bills? No. The postponement covers only the secured tax bill due each November and February. Supplemental bills and special assessments remain your responsibility.

Can co-owners apply? Yes, but all owners must sign the application. If co-owners do not meet age or disability requirements, the applicant must still meet income and equity tests for the household.

What happens if I refinance? Refinancing requires paying off the postponed amount at closing. Inform your lender early so the payoff is included in settlement statements.

Is interest tax-deductible? Interest paid upon repayment may be deductible as home mortgage interest, but consult a tax advisor. Keep payoff statements for tax records.

Can the state foreclose? The SCO prefers repayment at sale or transfer. However, if you fail to maintain eligibility, refuse to repay after a triggering event, or allow taxes to become delinquent for other years, foreclosure is possible though rare.

Additional Resources

• State Controller’s Property Tax Postponement Program
• SCO PTP Unit: (800) 952-5661 or [email protected] for application status and payoff quotes.
• County tax collector: Coordinate to confirm the postponed amount posted to your account.
• Legal and financial counseling: HUD-approved housing counselors and local Area Agencies on Aging can help evaluate whether postponement suits your long-term goals.

For homeowners struggling with property tax payments, California’s Property Tax Postponement Program offers a structured way to preserve homeownership without immediate cash outlays. By planning ahead, keeping impeccable records, and understanding the repayment obligation, you can use the program as a financial bridge while retaining the security of your home.