West Deer’s leaders are considering new rules that could stop low-income residents and senior citizens from having to pay increased real estate taxes.
Township Supervisor Brandon Forbes is pitching an idea that would add any township real estate tax increase as a lien on a person’s property.
It would not affect the property tax increases imposed by Deer Lakes School District.
Forbes said people who apply for the program would continue to pay the same amount of property taxes they paid before any increase. For example, if a person paid $400 in taxes, but the tax was increased by $50 to $450, that property owner would continue to pay only $400.
The deferred taxes would be paid by the homeowner upon sale or transfer of the home — just like any other lien.
“It gives low-income homeowners and a lot of seniors the ability not to bear the cost of an increase in taxes,” Forbes said.
Solicitor Gavin Robb said he will draft an ordinance that will mirror Pennsylvania’s Act 50 of 1998, which outlines provisions for the Real Estate Tax Deferment Program Act. He will have a draft ordinance to present to the supervisors in September.
At the supervisors’ meeting Wednesday, Supervisors Chairman Arlind Karpuzi said the program could help residents who can’t pay tax increases from going into an even more disadvantaged state.
Roughly 22% of West Deer residents are 65 and older, according to census figures. The township’s poverty rate is 5%.
Residents would have to meet an income threshold in order to participate in the program. They would have to prove their income eligibility, according to state law.
Township Manager Dan Mator likes the idea, but wonders if it will be worth it in the long run.
Mator said supervisors should consider what happens if a homeowner dies, has no children, and the home becomes dilapidated. The house could go to sheriff’s sale.
But there’s a chance no one will buy it if it’s over the reasonable sale value due to liens, including the deferred tax lien. The township might not recoup the deferred money.
Additionally, Mator said, if someone can’t afford an extra $50 a year, they probably can’t afford to put much upkeep into their home.
“This is the flip side of what is a generally great idea to help people out,” Mator said, “but there are some drawbacks to it that I believe the board should be mindful of.”
Forbes said the program could help a low-income person hang onto their home.
“I think it’s worth the board to consider, and just think about the difference that this could make, however small,” he said.
Supervisor Beverly Jordan asked if there could be a way for the township to keep tabs on people who apply for the program. That way, the people who can afford to pay taxes wouldn’t be taking advantage.
Robb said the township would have to comply with the state statute, which basically says people should act in good faith. There’s also an auditing option, but he said that wouldn’t be realistic.
According to state law, people who are granted access to the program will continue to remain eligible for tax deferrals as long as they continue to meet the eligibility requirements.
Robb said eligibility requirements, how the deferral works and the lien process all have to be consistent with state law.
“We certainly can’t say there’s not a potential for this program to be taken advantage of,” Robb said. “There’s a risk of that; there’s no question about that.”
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