Pay when you're dead
The legislation (2026-H 7567) would apply statewide and would be available to those 62 or older and those of any age who are permanently totally disabled or are disabled veterans.
Under it, the payment of property taxes on
single-family homes owned and occupied by those who qualify could be deferred
until the property is disposed because of the death of all owners or otherwise
sold or transferred. The deferred amount, which would be subject to a 6% annual
interest rate, would constitute a lien on the property and would be added to
its final tax bill.
“For most people, a home is their largest asset, an investment in their physical and financial security for life,” said Representative Cotter (D-Dist. 39, Exeter, Richmond, Hopkinton).
“Unfortunately, staying in that home can become unaffordable when people retire
or become disabled. Allowing property tax deferment would provide another
option, similar to a reverse mortgage, that would give homeowners more
opportunity to age in place and remain in the home they love for the rest of
their lives.”
Under the bill, owners would need to have at least 20% equity in their homes to be eligible. Those with reverse mortgages would not qualify, and neither would taxes paid through escrow accounts. Manufactured homes are included.
The bill would require an appropriation of $2 million
annually to fund the deferments. Since property taxes are collected by
municipalities, those funds would ensure that deferred tax payments do not
leave cities and towns with a budget gap.
The legislation has the support of AARP-Rhode Island.
“We talk a lot about ‘aging in place.’ Property tax deferral
programs make that possible. They give older adults the ability to stay in
their homes, maintain independence, and remain connected to their neighborhoods
— without the immediate financial strain of rising property taxes,” said
Catherine Taylor, AARP-RI state director.