Contrasting Property Tax Bills Passed Needy Seniors, Home Builders Could Benefit From Measures

Lawmakers sent two very different property tax exemption bills to Gov. Phil Batt on Monday.

The first would allow counties to defer taxes for needy seniors until they either die or sell their homes. County commissioners in each county would decide whether or not they want to allow such exemptions.

The second would exempt newly built speculative homes from property taxes for up to a year or until they sell. That one’s effective statewide next Jan. 1, if Batt signs it into law.

In Idaho, giving one group a property tax exemption means everyone else must pay a little more to make up the difference. But on both bills, sponsors argued that the trade-off was worth it in the interest of fairness.

“This is real property tax relief,” Rep. Mark Stubbs, R-Twin Falls, said of the measure dealing with seniors.

“It’ll help these people that are in dire need,” said Rep. Ruby Stone, R-Boise.

That bill, SB 1202, passed the House on a 62-7 vote. All North Idaho representatives except Larry Watson, D-Wallace, voted for it. It had earlier passed the Senate.

Watson, a deputy Shoshone County assessor, said he liked the idea, but saw some technical problems in the bill.

The measure would allow county commissioners to pass an ordinance allowing the exemptions for senior citizens who own their homes free and clear, have lived in them five years or more, meet income and asset limits, and have paid the previous year’s property tax.

Commissioners would decide whether interest would be charged during the tax deferral. If the homeowner dies, the back taxes would be paid by the estate. If the house is sold, the taxes would come out of the proceeds of the sale.

“My county treasurer was concerned about the burden this would place on the heirs,” said Rep. Wendy Jaquet, D-Ketchum. “I think the heirs will be laughing all the way to the bank.”

Because of the requirement that there be no mortgage on the house, the proceeds from the sale will be guaranteed to cover the back taxes, supporters of the bill said.

On the tax exemption for builders, sponsors said it would “level the playing field” by treating newly built homes the same as unsold mobile homes. Unsold mobile homes aren’t subject to property tax.

All North Idaho senators voted in favor of the tax break, which cleared the Senate on a 31-2 vote. It had earlier passed the House unanimously.

Sean Strickler, lobbyist for the Idaho Building Contractors Association, said builders shift their costs to the home-buyer, so cutting their costs will make housing more affordable.

Sen. Gordon Crow, R-Hayden, agreed. “I think it’s very good for Kootenai County, particularly with the growth we’re experiencing and the high cost of housing,” he said. “It’ll allow more people to get in.”

Kootenai County Commissioner Ron Rankin disagreed, and earlier called the bill a “scam” and “corporate welfare for developers.”

Sen. Clyde Boatright, R-Rathdrum, said he supported the bill because, “I’m a real estate agent. I support my industry.”

He added, “I think it’s just an equitable thing, too.”

Sen. Jack Riggs, R-Coeur d’Alene, agreed. “People who build these houses, it really is like a business inventory for them. That concept makes sense.”

Business inventories aren’t taxed. Idaho at one time had a business inventory tax, but eliminated it when the state sales tax was imposed.

, DataTimes