Strategy 60 of 107
Claim your state's property tax credit or circuit breaker
What it is
Many states give a credit or rebate when property taxes are high compared with income (often called a circuit breaker).
Steps
- Many states give a credit or rebate when property taxes are high compared with income (often called a circuit breaker).
- Check your state revenue department and file the form with your state return.
- Send the credit to principal.
Repeat: Every tax year.
Measure: Credit received (enter as a yearly amount).
Try it in the calculator Enter its amount in "Yearly amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Not every state has one; limits differ.
Who it fits
Average household, Single, No high school diploma, No college degree, College students, Grandmas and grandpas (62 and over), Married couples
Needs
Any homeowner with a mortgage.
How predictable
Most predictable: once in place, the payoff date is arithmetic
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: many states give a credit or rebate when property taxes are high compared with income (often called a circuit breaker).
Suppose it brings $6,000 once a year on principal. The loan would be paid off in 17 years 11 months instead of 30 years, saving about $173,949 in interest. To finish in five years, they would still need about $3,488 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sequences that use it
- Bill-cutting stack for 65 and over: Programs built for limited incomes, applied for together. The bills that shrink become principal payments.
Sources and more information
Where to get help
- CFPB: Find a HUD-approved housing counselor (free or low cost) consumerfinance.gov
- IRS: Free tax preparation for qualifying taxpayers (VITA and TCE) irs.gov
- CFPB: Submit a complaint about a lender or servicer consumerfinance.gov
Related strategies
- 57. Re-shop auto insurance and send the savings to principal
- 56. Raise insurance deductibles once a reserve covers them
- 55. Phone or internet discount through Lifeline
- 54. Energy bill help through LIHEAP
- 66. Audit the servicer: make sure every extra dollar hit principal
- 53. 65 and over with limited income: let a Medicare Savings Program pay the premiums