Property taxes fund essential local services like schools, roads, and public safety, but they hit fixed-income households hardest. For many seniors over 65, these annual bills can consume a significant portion of retirement income, especially in high-tax regions.
Nationally, effective property tax rates vary widely by state, with some areas seeing bills equivalent to 1-10% of household income for homeowners. In high-burden states like New Jersey or Connecticut, median bills can exceed $9,000 annually in certain cities. Without relief, rising assessments force tough choices: delay maintenance, downsize, or even face foreclosure risks.
Fortunately, no state fully eliminates property taxes for seniors, but many provide exemptions, credits, deferrals, or freezes to ease the load — with several meaningful updates taking effect in 2026.
Several states have enacted or expanded protections specifically targeting seniors, with notable updates for 2026.
In New York, Governor Kathy Hochul signed legislation raising the Senior Citizen Homeowners' Exemption (SCHE) from 50% to up to 65% of a home's assessed value for qualifying residents aged 65+. This change, effective for taxable years beginning in 2026, could save the average eligible senior several hundred dollars annually, helping long-time homeowners stay in their communities amid rising costs. Localities must opt in, and savings vary by county and income eligibility.
Montana introduces a new tiered homestead rate system in 2026, applying reduced rates ranging from 0.76% to 1.10% (down from a previous flat 1.35%) for qualifying primary residences and long-term rentals. Seniors and other homeowners who apply for the homestead classification between December 1, 2025, and March 1, 2026, will benefit from these lower rates on their principal residence.
Other states like Ohio and Missouri are implementing expanded credits and additional relief measures for seniors, contributing to billions in statewide property tax savings over the coming years.
Programs such as circuit-breaker credits (refunds when taxes exceed a percentage of income) and deferral options (postponing payment until the home is sold) continue in many states. New Jersey's various senior freeze and ANCHOR programs, along with Illinois' income eligibility expansions for deferrals, also provide ongoing support into 2026.
While property taxes are likely to continue rising in many areas due to higher assessments and local needs, the 2026 landscape shows growing state commitment to protecting seniors. From substantial exemption increases in New York to new lower tiered rates in Montana, these changes could save eligible retirees hundreds — or even thousands — annually.
Seniors should consult their local tax assessor or a financial advisor to confirm available benefits. With proactive planning, many can reduce the burden and maintain housing stability in retirement.
