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How Does a “Senior Freeze” Work?

MP900390083 (1)The Senior Freeze is a program that helps eligible seniors and disabled people, by protecting them from property tax increases, or if they live in a mobile home park, increases in site fees. However, there are requirements that must be met, including home ownership.

In some families, a decision is made to transfer the parent’s home to their children through the use of a life estate. It’s used to help parents become eligible for certain government benefits, among other estate planning purposes. However, this could cause parents to lose their ability to receive the Senior Freeze, which reimburses eligible seniors and disabled people for increases to property tax or mobile home park site fees.

As far as property with a life estate,’s recent article, “Will I get the Senior Freeze if I have a life estate for my home?” explains that it’s important to determine who remains the owner of the property. The article says that the Senior Freeze program is a bit of a misnomer, because the benefit doesn’t actually “freeze” property taxes. The program actually reimburses eligible individuals for any property tax increases incurred, once an individual qualifies for the benefit.

An eligible person gets the difference between the property tax amount in the first year of eligibility—the “base year”—and the current year’s property tax amount, presuming it is higher. For example, in New Jersey, a person has to have two consecutive years of eligibility before applying and satisfy the following requirements:

* The applicant or his/her spouse are at least 65 or receiving Social Security disability benefits;

* The applicant lived in the state continuously since Dec. 31, 2007, or earlier, as a homeowner or renter

* The applicant owned and lived in his/her home since Dec. 14, 2014 or earlier (and still owns and lives in the home);

* He or she has paid the full amount of the property taxes due; and

* The applicant meets the income limit (currently $89,013 in NJ).

The program typically doesn’t apply to vacation homes, second homes, rental properties, or properties that have more than four units.

It’s not uncommon for seniors to transfer a home to a trust for a variety of purposes, including government benefit planning. However, conveying your home entirely may disqualify you from the Senior Freeze program. An applicant is considered the owner of the property, if she retains a life estate in the property, which must be evidenced in the deed or other legal document showing the applicant’s right to occupy the property.

Before transferring any real estate or making any large gifts, talk with an estate planning elder law attorney. While the retention of a life estate may let an applicant qualify for the Senior Freeze if other qualifications are met, it may have a bigger impact on other benefits.

Reference: (December 11, 2019) “Will I get the Senior Freeze if I have a life estate for my home?”