The state Tax Commission has set the maximum homeowner's exemption from property taxes for 2012, and it's dropping again, this time down to $83,974. That's down from $92,040 this year. The exemption is tied to the Idaho Home Price Index, so it goes up and down with Idaho home values, under a 2006 law. The maximum exemption hit a high of $104,471 in 2009, then began declining as Idaho home values dropped.

The homeowner's exemption exempts 50 percent of the value of an owner-occupied home from property taxes, but it's capped at the annually-adjusted maximum. That maximum was set at a fixed $50,000 for 23 years, from 1983 to 2005 - causing a big property tax shift onto homeowners as home values escalated but the exemption stayed the same - before the 2006 Legislature decided to raise it to $75,000 and tie it to future ups and downs in home prices.

The drop in the maximum from 2011 to 2012 won't make any difference for owners of lower-priced homes, according to Alan Dornfest, property tax policy supervisor for the Tax Commission, who noted, “There will be no change in the amount of the homeowner’s exemption for anyone whose home has a 2012 market value under $167,948.” Click below for the Tax Commission's full announcement and a table showing changes in the maximum exemption over the years.

 

Idaho State Tax Commission

FOR IMMEDIATE RELEASE

 

Idaho Tax Commission sets 2012 homeowner’s exemption

BOISE — The maximum homeowner’s exemption for 2012 will decrease to $83,974, according to calculations by the Idaho State Tax Commission. The maximum exemption for 2011 is $92,040.

“The decrease reflects falling housing prices in 2010 and through the second quarter of 2011,” said Alan Dornfest, property tax policy supervisor for the Tax Commission. He added, “The exemption ceiling is tied by law to changes in the Idaho House Price Index calculated by the Federal Housing Finance Agency.” 

Idaho provides a partial property tax exemption to qualified homeowners for their primary dwelling and up to one acre of land. The law exempts 50 percent of the assessed value from taxation; however, the exemption can’t exceed the maximum value that changes each year.

“There will be no change in the amount of the homeowner’s exemption for anyone whose home has a 2012 market value under $167,948,” explained Dornfest. “The impact of the exemption on property taxes will depend on how much 2012 property values change.” 

Idaho’s homeowner’s exemption began in 1980, with a maximum of $10,000. It remained at that level until 1983, when it was raised to $50,000 by voter initiative. The 2006 Idaho Legislature raised the exemption to $75,000 and tied future numbers to the House Price Index.

 

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History of maximum homeowner's exemption

Years	Maximum
1980-1982	$10,000
1983-2005	$50,000
2006	$75,000
2007	$89,325
2008	$100,938
2009	$104,471
2010	$101,153
2011	$92,040
2012	$83,974

 

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