Individual property tax assessments and actual property tax bills are influenced by a variety of factors, including:
- Changes to the property’s assessed value over time
- Changes to levies, special assessments and/or adjustments by tax district
- Changes to tax legislation (for example, House Bill 389 that was passed in May 2021)
- Whether or not a homeowner’s exemption has been claimed on the property
- Whether or not the property owner participated in a circuit breaker program
- And, in 2020, a one–time property tax reduction due to Idaho’s Public Safety Grant Initiative
More about the one-time property tax reduction in 2020
Let’s take a closer look at three of these factors, starting with the one-time property tax reduction in 2020. According to the Ada County’s 2020 Tax Reduction FAQ guide, “Idaho created the Public Safety Grant Initiative to leverage CARES Act funds to cover local public safety personnel expenses associated with the coronavirus. To participate in this initiative, local elected officials agreed not to increase the base property tax budgets and not to take the allowable 3% increase. As a result, property taxpayers are receiving a one-time property tax reduction for 2020.”
It’s important to note that this reduction will not be in effect for 2021, so the tax assessments that homeowners are receiving in the coming weeks may be significantly higher than a year ago, catching property owners and those buying this year by surprise. Ada County property owners can find out how much they saved on taxes due to this reduction in 2020 on the front of their 2020 Ada County Consolidated Property Tax Bill.
Rising property values will impact tax assessments
It’s no secret – homes are selling for more year-over-year, which results in higher taxable value. According to this article from the Idaho Press, and this one from the Idaho Statesman, both Ada and Canyon County property valuations are up significantly – about 25% in Ada and 30% in Canyon. However, it’s worth noting that assessment increases will vary by area, and the increase in assessed values does not directly correlate to an increase in property taxes — meaning that while homeowners should expect their tax bill to increase, they shouldn’t expect it to be 25-30% higher.
Another factor that will affect property tax bills is the passage of House Bill 389
According to this article from the Associated Press, “the measure raises the homeowner’s exemption from $100,000 to $125,000. It also raises a property tax reduction for qualifying low-income seniors from $1,320 to $1,500.” You can read the full bill here. Local taxing authorities are still working on projections of what these changes mean for property taxes, however, homeowners who claim the homeowner’s exemption should enjoy a larger deduction compared to previous years when they receive tax bills later in the year. How much this will offset the increases in taxable values and the elimination of the one-time reduction in 2020 is yet to be determined.
What can I share with clients?
In short, there are a lot of factors (particularly this year due to the elimination of one-time reductions, rising property values, and tax law changes) that determine the tax assessment and tax bill for an individual property. Property tax assessments will be sent out in the coming weeks, with the first of the Ada County tax assessments being sent on Friday, May 28, 2021. As a reminder, property tax assessments can be appealed, and you can learn more about the process here on our website. Homeowners will need to wait a bit longer before they know their property tax liability, as tax bills will be sent in November.
If you’re working with buyer clients, advise them that the taxes listed on the MLS listing sheet is typically for the most recent tax year which is an informative data point but is not a guarantee for future tax bills. Taxes may be higher in subsequent years, based on the various factors that determine tax liability that we’ve outlined above, and buyers should plan accordingly. For a more comprehensive understanding of a property’s tax history, visit the county assessor’s website or contact the assessor’s office to talk to the appraiser assigned to the parcel.
For those whose mortgage lender collects property taxes as part of the monthly payment, it’s important to note that monthly payments may need to be adjusted, or a one-time payment may need to be made, if the escrow account is insufficient to cover any tax bill changes. Lenders will typically send written correspondence regarding such changes and options and homeowners are encouraged to contact them directly with any questions specific to their situation.
