Oregon Senior and Disabled Property Tax Deferral

Quick Facts

• How it works: Oregon pays property taxes on behalf of qualified senior and disabled homeowners, placing a lien on the property. Taxes plus interest are repaid when the home is sold, refinanced, or the participant no longer qualifies.
• Eligibility highlights: Applicants must be age 62+ or disabled, have lived in the home for at least five years, maintain homeowner’s insurance, meet income and net worth limits, and avoid disqualifying reverse mortgage loans.
• Benefit amount: The state pays 100% of the property tax bill (excluding special assessments). Participants receive annual statements showing the amount paid and accumulating balance.
• Application deadline: File Form 6151 between January 1 and April 15 to have the state pay the upcoming November tax bill.

Program Overview

The Senior and Disabled Property Tax Deferral program, authorized under ORS 311.666–701, is designed to help low- to moderate-income seniors and people with disabilities remain in their homes despite rising property taxes. Instead of receiving a credit or exemption, participants defer taxes, which the Oregon Department of Revenue pays directly to the county each year. The state charges simple interest (currently 6%) on the deferred amounts. Repayment occurs when the property is sold, the participant dies (unless a surviving spouse or partner continues the program), or the participant becomes ineligible.

Eligibility Details

• Age or disability: Applicants must be at least 62 years old by April 15 of the application year or receiving federal Social Security disability benefits. Proof includes SSA award letters or disability determinations.
• Ownership and occupancy: Applicants must own and live in the property for five consecutive years before January 1 of the application year. The property must be the principal residence.
• Income limit: Household income cannot exceed $58,000 (2024). Income includes taxable and nontaxable amounts from all household members, such as Social Security, pensions, wages, interest, dividends, rental income, and business income.
• Net worth limit: Total net worth of the applicant, spouse, and dependents residing in the home must be below $500,000. Net worth excludes the value of the home but includes other real estate, investments, savings, vehicles, and business interests.
• Home equity: The property must have sufficient equity to secure the state’s lien. The state calculates the maximum deferral based on market value minus outstanding liens.
• Insurance requirement: Participants must maintain homeowner’s insurance with the state named as loss payee. Proof of insurance must accompany the application.
• Mortgage restrictions: Reverse mortgages obtained after July 1, 2011, generally disqualify applicants. Some older reverse mortgages are grandfathered if the homeowner remained continuously enrolled.

Application Process

1. Obtain Form 6151: Available on the Department of Revenue website or by mail. The form includes sections for income, net worth, property details, and insurance information.
2. Gather documentation: Proof of age/disability, federal tax return, SSA-1099, pension statements, bank statements, investment account summaries, homeowner’s insurance declarations, mortgage statements, and property tax statements.
3. Complete the application: Provide detailed income and asset information, list liens on the property, and authorize the Department to obtain financial records. All owners residing in the home must sign.
4. Submit between January 1 and April 15: Mail or deliver the application to the Oregon Department of Revenue. Applications received after April 15 are generally denied for that tax year.
5. Await approval: The Department reviews applications in late spring and issues approval letters in July. Approved participants remain in the program until they withdraw or become ineligible.
6. Annual certification: Each year participants receive a re-certification letter to confirm continued eligibility. Respond by the deadline with any requested documentation.

Program Mechanics

• Payment of taxes: Once approved, the Department pays property taxes to the county on your behalf each November. Participants receive a statement showing the amount paid and the cumulative balance.
• Interest accrual: Interest accrues at 6% simple interest (rate subject to legislative change). Interest does not compound, but the balance grows each year.
• Lien priority: The state records a lien on the property. This lien must remain first or second position behind a mortgage. Additional liens or cash-out refinances can jeopardize eligibility.
• Repayment: Taxes and interest become due when the participant sells the property, moves out, or dies. Surviving spouses or domestic partners may continue deferral if they meet eligibility requirements and apply within 90 days.

Coordination With Other Relief

• Disabled Veteran Exemption: Veterans with 40%+ disability may also claim property tax exemptions. Combining the exemption with deferral reduces the amount deferred and interest accrued.
• Senior Property Tax Deferral for Manufactured Structures: Manufactured home owners can also enroll if they own the structure and the land or have a long-term lease.
• Property Tax Payment Plans: Participants should not enroll in county payment plans while in deferral. The state pays the full amount, so additional payments are unnecessary.
• Utility assistance: Pair deferral with Oregon Energy Assistance Program or LIHEAP to keep overall housing costs stable.

Strategic Considerations

• Evaluate long-term costs: Because interest accrues, discuss deferral with family members who may inherit the property. Estimate the balance growth over time to ensure the home will have sufficient equity for repayment.
• Maintain insurance: Lapses in homeowner’s insurance can trigger removal from the program. Set automatic payments and notify the insurer to include the Department of Revenue as loss payee.
• Monitor equity: Avoid additional borrowing that reduces equity (e.g., new home equity loans). The state may remove participants if equity falls below required thresholds.
• Keep records: Save annual statements, approval letters, and correspondence. Provide copies to trusted family members or advisors.
• Plan for transitions: If you anticipate moving to assisted living, consult with the Department about how long you can remain enrolled while the home is vacant. Typically, participants must resume paying taxes once they no longer occupy the home.

Example Scenarios

1. Retired couple: The Lees, both 70, live on $40,000 annual income with $200,000 in investments. Net worth is under $500,000. They enroll in deferral, and the state pays their $3,800 property tax bill each year. After 10 years, the deferred balance plus interest totals roughly $45,000, to be repaid when the home is sold.
2. Disabled homeowner: Ms. Nguyen, 58, receives SSDI and owns her Portland home valued at $350,000 with a $90,000 mortgage. She enrolls in deferral to avoid delinquency while focusing on medical expenses. The state pays her $4,200 tax bill annually, and she monitors the balance to ensure equity remains sufficient.
3. Surviving spouse: Mr. Alvarez’s wife passed away while enrolled. He, age 65, applies within 90 days, meets income limits, and continues the deferral, preventing a sudden tax bill during a difficult transition.

Common Pitfalls

• Reverse mortgages: Taking out a new reverse mortgage generally disqualifies you. Consult the Department before refinancing or borrowing.
• Missing recertification: Failing to return the annual recertification form results in removal. Set reminders to respond quickly.
• Insurance lapses: Without proof of insurance, the Department will cancel participation. Provide updated declarations whenever policies renew.
• Incorrect income reporting: Understating income or assets can lead to penalties and removal. Provide complete documentation.
• Late application: Applications postmarked after April 15 are not considered. Plan ahead to gather documents early.

Frequently Asked Questions

Does the deferral cover special assessments? No. Homeowners must pay special assessments, sewer charges, and other fees directly to the county.

Can I make voluntary payments? Yes. Participants may send voluntary payments to reduce the deferred balance. Contact the Department for payoff instructions.

What happens if I move temporarily? You may remain enrolled during short-term absences (e.g., medical treatment) if you intend to return. Notify the Department if you will be away for more than one year.

Is interest rate fixed? The legislature sets the rate; it has historically been 6%. Check program updates for rate changes.

Can heirs refinance to pay the balance? Yes. After the participant’s death, heirs can refinance or sell the property to repay the state lien and retain ownership.

Additional Resources

• Oregon Department of Revenue Deferral Program: https://www.oregon.gov/dor/programs/property/Pages/deferral.aspx
• Program forms and instructions: https://www.oregon.gov/dor/forms/Pages/default.aspx (search “6151”)
• Senior and Disabled Property Tax Deferral statutes: https://www.oregonlegislature.gov/bills_laws/ors/ors311.html
• Oregon Aging and Disability Resource Connection: https://www.adrcoforegon.org/
• Legal Aid Services of Oregon: https://www.lasoregon.org/

Oregon’s deferral program is a powerful tool for homeowners who expect to age in place but need immediate relief from property taxes. With careful planning, regular compliance, and transparent communication with family, participants can maintain housing stability while managing long-term repayment responsibly.