Modified Homestead Act will change exemption amount on property taxes

Your property taxes could be affected with a modification to House Bill No. 594, also known as the Homestead Act. The act is meant to give homeowners a break on their property taxes.

Property tax exemptions first began in 1980 at a base amount of $10,000. In 1982 the Legislature voted to up that amount to $50,000. In 2005 as home values began to increase even more, the legislature voted to tie the amount to the average amount homes were sold for across the state.

“It was just done to give homeowners a break because they were essentially paying the land share – what the state was running on,”said Dave Packer, Bannock County assessor.

So legislators have proposed to change the law, making the amount of the exemption independent of the home value index. Packer said the reason it decreased starting in 2010 was homes in other areas of the state losing value.

“When areas like Boise or Coeur d’Alene start to lost the values of their homes (and some of them went down better than 50 percent),” said Packer, “that forced the index down, which forced the exemption down.”

Packer said if you own your home and live in it, you qualify for this exemption.

Here”s how it works: In 2015, if your home is worth less than $180,000, you will be paying property taxes on half of the homes value. If your home is worth more than $180,000, you will be exempt from $90,000.

That means anybody in between the 2014 amount tied to the index – about $84,000 – and the 2015 amount capped at $90,000 will likely see the most change. Packer said the exemption category you fall under will likely only change if your home value falls below the $180,000 mark (if it was above it) or if your home value goes above $180,000 (if it was below).

To read the progress of the bill, find it here on the Idaho Legislature website: www.legislature.idaho.gov/legislation/2014/H0594.htm

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