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Idaho lawmaker suggests adjusting homeowner exemption to combat increasing property taxes

Property assessment notices are showing rapid increases in home values. Homeowners are now faced with inflated property tax bills as a result.

CANYON COUNTY, Idaho — Property values across Canyon County appreciated by 30% to 60% from the previous year, according to the Canyon County Assessor's Office.

It's creating a burden for homeowners who fear trouble affording their upcoming property tax bill.

Under current Idaho law, homeowners can exempt 50% of their primary residence's value from property taxes; however, that exemption caps at $125,000. A home valued at, or above, $250,000 receives the maximum exemption.

That $125,000 limit is a stagnant number, but it wasn't always this way.

"I don't have a real good answer as to why that was capped," Canyon County Assessor Brian Stender said.

The exemption was once a fluid number that drifted from year-to-year, according to Stender. The exemption cap would increase or decrease in proportion to the Federal Housing Finance's Housing Price Index (HPI).

With this fluid system, the homeowner exemption moved as follows:

  • 2006: $75,000
  • 2007: $75,000
  • 2008: $100,938
  • 2009: $100,938
  • 2010: $101,153
  • 2011: $101,153
  • 2012: $83,974
  • 2013: $83,974
  • 2014: $83,920
  • 2015: $83,920
  • 2016: $94,745

In 2016, the state legislature passed House Bill 431 which froze the homeowner's exemption at $100,000. Lawmakers have since raised the exemption to $125,000 - the figure we use today.

But even at the updated $125,000 exemption cap, homeowners are shouldering a larger burden of the overall property taxes pool.

Most recently, Canyon County residential property owners paid 75% of all Canyon County property taxes. In 2016, residential property footed 64% of the same bill.

"In my career, this is a pretty substantial tax burden shifted toward the residential sector," Stender said.

Under the previous HPI model, the 2022 max homeowner's exemption would be $174,229, nearly $50,000 more than the current stagnant cap.

For this reason, Representative Bruce Skaug (R) of Nampa is trying to bring back a indexed exemption cap.

"We have an unfair burden as homeowners paying property taxes," Rep. Skaug said.

Rep. Skaug offered a piece of draft legislation in the 2021 Legislative Session to index the exemption. The draft allows homeowners to exempt 55% of their properties value. The exemption is capped at 50% of the median home sale price according to the Idaho State Tax Commission.

Under this model, the 2022 homeowner's exemption would have capped at roughly $180,000, according to Stender.

"The [property tax burden shift] to residential - from commercial and agricultural - still would have continued, but not as drastic as it is today," Stender said.

The draft never made it out of committee despite earning 41 house co-sponsors from both ends of the political aisle.

"The chairman, for his own reasons and philosophy, didn't want to hear the bill. So, it was not heard," Rep. Skaug said. "This is one way that we can help solve people's bank accounts and help them out a lot. We need to pass it - and soon."

The Legislature does not return to session until the beginning of the 2023 calendar year.

Boise Mayor Lauren McLean posted a statement about the rising property taxes on Facebook Monday afternoon. In the post McLean stated that she has heard from locals that they are seeing "their property tax assessments and seeing increases of 10%, 25%, 35% and even more," McLean said. She said the increase is unacceptable and that the city is doing everything it can to keep people in their homes.

McLean also appeared to express her disappointment with Idaho lawmakers, saying: "It is incredibly frustrating - beyond frustrating - to be doing everything we can to provide relief to residents, even adding a new circuit breaker program, while those who can provide transformational property tax relief and address rising assessments fail to do so. We'll continue to advocate for real solutions for families."

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