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Property Tax Relief for Older Adults in Missouri

Executive Summary

Increasing housing values and associated property taxes can have a devastating impact on older adults in Missouri. In many cases, older people may end up being “priced-out” of the home they have lived in for decades and face being separated from their neighbors and the community in which they’ve raised their families. Property tax relief targeted toward both homeowners and renters (who may see higher rental rates tied to property tax increases) can give a much-needed break to older adults living on fixed incomes.

Yet property taxes are also an important source of revenue for local governments and are used to fund schools, fire departments, and senior services in communities across Missouri. While it is critically important to provide targeted property tax relief to help older adults remain in their homes and communities, it is equally important to do so in a way that protects a community’s ability to provide critical services for those same seniors and their families.

Fortunately, there are a variety of ways to deliver property tax relief to those who need it most, while avoiding unintended consequences like cuts to local services or increases in user fees and sales taxes.

This report offers five key recommendations to provide property tax relief to older adults in Missouri:

  • Improve Missouri’s existing “Circuit Breaker” Tax Credit for renters and owners by expanding eligibility and increasing the credit amount. Missouri’s Circuit Breaker tax credit already provides targeted property tax relief to older adults across our state. Strengthening and expanding the existing credit would help to provide much needed relief to older Missourians.
  • Supplement Missouri’s Circuit Breaker Tax credit with a credit toward large increases in property taxes for low- and moderate income homeowners. Supplementing the existing property tax credit could help prevent displacement among homeowners by directly targeting households experiencing unexpected increases in property tax bills.
  • Use federal stimulus funds to provide one-time, direct relief to current Circuit Breaker recipients. During the pandemic, housing insecurity has increased. The existing circuit breaker tax credit provides an efficient mechanism for providing property tax relief that helps keep older Missourians in their homes and communities.
  • Implement an income & age limited Homestead Exemption for Missouri homeowners. A Homestead Exemption could be layered on top of Missouri’s existing Circuit Breaker tax credit to provide property tax relief to low-income homeowners whose income is too high to qualify for the Circuit Breaker tax credit.
  • Avoid broad-based property tax credits and caps. Property tax relief targeted toward those most in need is more cost-effective than relief for all older homeowners, many of whom have little risk of housing insecurity. Moreover, unlike broad-based credits, a targeted approach avoids severe erosion of the services provided by local governments.

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