Print Friendly HOUSE BILL NO. 275 – Property tax, deferral, when
HOUSE BILL NO. 275
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H0275...............................................by REVENUE AND TAXATION
PROPERTY TAX - DEFERRED - Adds to existing law to provide for deferral of
taxes on certain residential real property if the claimant has lived on the
property for ten consecutive years preceding application.
02/28 House intro - 1st rdg - to printing
03/01 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 275
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO DEFERRING TAXES ON CERTAIN REAL PROPERTY; AMENDING TITLE 63, IDAHO
3 CODE, BY THE ADDITION OF A NEW CHAPTER 18, TITLE 63, IDAHO CODE, TO PRO-
4 VIDE A STATEMENT OF PURPOSE, TO PROVIDE DEFINITIONS, TO PROVIDE THAT A
5 CLAIM FOR PROPERTY TAX DEFERRAL IS PERSONAL AND TO PROVIDE EXCEPTIONS, TO
6 PROVIDE THE FORM OF CLAIMS, TO PROVIDE THE AMOUNT OF DEFERRAL, TO PROVIDE
7 FOR FILING A CLAIM AND TO PROVIDE TIME REQUIREMENTS, TO PROVIDE FOR DURA-
8 TION OF DEFERRAL AND TO PROVIDE FOR PAYMENT AT CESSATION OF DEFERRAL, TO
9 PROVIDE PENALTIES FOR FAILURE TO GIVE NOTICE OF TRANSFER OF OWNERSHIP;
10 DECLARING AN EMERGENCY, PROVIDING RETROACTIVE APPLICATION AND PROVIDING
11 APPLICATION TO TAX YEAR 2005.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Title 63, Idaho Code, be, and the same is hereby amended
14 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
15 ter 18, Title 63, Idaho Code, and to read as follows:
16 CHAPTER 18
17 TAXES DEFERRED ON CERTAIN RESIDENTIAL PROPERTY
18 63-1801. PURPOSE. The purpose of this chapter is to protect certain
19 homeowners from increases in assessed valuations and to defer taxation upon
20 the increased valuation until certain events occur causing the transfer of
21 ownership of the home.
22 63-1802. DEFINITIONS. As used in this chapter:
23 (1) "Claimant" means a person who has filed a claim under the provisions
24 of this chapter and who on January 1 of the year in which the claim is filed:
25 (a) Is an owner who occupies the homestead which is the subject of the
26 claim and has occupied the homestead which is the subject of the claim for
27 at least ten (10) consecutive years preceding application and the property
28 has been also taxable during that time;
29 (b) Is a resident of the state of Idaho.
30 (2) "Homestead" means the dwelling, owner-occupied by the claimant and
31 shall be as defined in section 63-701, Idaho Code.
32 (3) "Occupied" means actual use and possession.
33 (4) "Owner" shall be as defined in section 63-701, Idaho Code.
34 (5) "Primary dwelling place" shall be as defined in section 63-701, Idaho
35 Code, provided the claimant resided therein on January 1 and for at least ten
36 (10) consecutive years preceding application.
37 (6) "Transfer of ownership" means either the sale or other transfer of
38 title accompanied by change of possession of real property. "Transfer of own-
39 ership" shall include lease or possession and occupation for a period of one
40 (1) year or more measured either by written documentation of such lease or by,
41 in fact, change of occupation in exchange for payment to the property owners
1 as established by credible evidence. The term "transfer of ownership" shall
2 not include the purchase or transfer of real property between spouses of the
4 (a) Transfers to a trustee for the beneficial use of a spouse, or the
5 surviving spouse of a deceased transferor, or by a trustee of such a trust
6 to the spouse of the trustor;
7 (b) Transfers to a spouse which take effect upon the death of a spouse;
8 (c) Transfers to a spouse or former spouse in connection with a property
9 settlement agreement or decree of divorce;
10 (d) The creation, transfer or termination, solely between spouses, of any
11 co-owner's interest; or
12 (e) The distribution of a legal entity's property to a spouse or former
13 spouse in exchange for the interest of the spouse in the legal entity in
14 connection with a property settlement agreement or a decree of divorce.
15 63-1803. CLAIM IS PERSONAL -- EXCEPTIONS. (1) The right to file a claim
16 under the provisions of this chapter shall be personal to the claimant and
17 shall not survive his death. Such right may be exercised on behalf of a living
18 claimant by an agent authorized in writing to so act or by a guardian or other
19 representative acting pursuant to judicial authority. If a claimant dies after
20 having filed a timely claim, the amount thereof shall be allowed to his per-
21 sonal representative, if one is appointed, or to surviving heirs.
22 (2) In the case of property owned by an estate, the deceased owner's
23 widow or widower:
24 (a) May file a claim on behalf of his or her deceased spouse if the
25 deceased spouse qualified or would have qualified as a claimant on January
26 1 of the year in which the claim is filed; or
27 (b) Shall be deemed the owner of the property in any year after the year
28 of the death of the spouse.
29 63-1804. FORM OF CLAIMS. (1) Any claim filed shall be signed by the
30 claimant. By signing such claim, the claimant shall attest to the truth of
31 such claim, and shall be subject to the penalties provided by section 18-5401,
32 Idaho Code, for stating as true any material fact known to be false.
33 (2) All claims shall be made on forms prescribed by the state tax commis-
34 sion and shall be in triplicate. One (1) copy of the form shall be provided to
35 the claimant, one (1) copy shall be kept for all county purposes, and one (1)
36 copy shall be forwarded to the state tax commission.
37 (3) By filing a claim, a claimant does not relinquish any rights or reme-
38 dies he or she may otherwise have pursuant to law. The county commissioners
39 may grant any such claimant a deferral of property taxes if a claim has been
40 filed under the provisions of this chapter.
41 (4) When an "owner" is any person who as grantor created a revocable
42 trust and named himself or herself as beneficiary of that trust, he or she may
43 provide proof of the revocable trust with an affidavit stating:
44 (a) The name of the grantor;
45 (b) A statement that the grantor is the beneficiary of the trust;
46 (c) The trust is revocable during the grantor's lifetime; and
47 (d) The grantor is the owner-occupier of the residential property and
48 uses the property as the primary dwelling place of the owner as of January
50 The affidavit shall include the attaching of the copies of those portions
51 of the trust which set forth the grantor, the grantor as beneficiary, the
52 revocable character of the trust and the signature page of the trust.
1 63-1805. AMOUNT OF DEFERRAL. (1) Each claimant applying and qualifying
2 for a deferral in property taxes under this chapter shall be allowed a defer-
3 ral in property taxes on his homestead for the current year only, in the
4 amounts provided by subsection (3) of this section.
5 (2) All property taxes on the homestead continue to be the responsibility
6 of the individual taxpayer, all property taxes continue to be perpetual liens
7 against the property against which assessed, and all property taxes may be
8 collected and enforced in the usual manner, if the taxpayer does not receive
9 any property tax deferral under this chapter or if the taxpayer receives less
10 property tax deferral than the whole amount of property taxes with which he is
12 (3) Claimants may apply pursuant to the provisions of this chapter to
13 defer a percentage of property taxes levied against an eligible homestead. The
14 amount of taxes that may be deferred shall be equal to the difference between
15 the immediately preceding year's market value and the current year's market
16 value multiplied by the current year's property tax levy rate.
17 63-1806. FILING A CLAIM -- TIME REQUIREMENTS. (1) Any claim for property
18 tax deferral to be granted under the provisions of this chapter shall be filed
19 in the office of the county assessor between January 1 and April 15 of each
20 year. The county assessor shall examine each claim and determine whether it is
21 in conformity with this chapter and shall accordingly approve, modify or dis-
22 approve the claim in total at the time the application is received. Addition-
23 ally, the county assessor shall notify the claimant in writing by May 1 if his
24 claim has been modified or has been disapproved. The notice of modification or
25 disapproval shall declare that the claimant may appeal the assessor's decision
26 to the county board of equalization, and shall state the time and place that
27 the county board of equalization shall meet for such purposes. An owner need
28 only make application for the deferral described in this chapter once, as long
29 as the owner still qualifies for the deferral.
30 (2) All claims filed with the county assessor shall be completed by him
31 and forwarded to the county commissioners, which shall convene as a board of
32 equalization, any other provision of law notwithstanding, on or before May 15,
33 and shall approve all claims approved by the county assessor, and shall
34 approve the action of the county assessor in modifying or disapproving all
35 other claims unless an appeal has been filed with the board of equalization
36 prior to May 15. In considering any appeal of the assessor's decision in modi-
37 fying or disapproving a claim, the board of equalization may affirm the
38 assessor's decision, may modify the assessor's decision, or may reject the
39 assessor's decision and proceed to approve all or any part of the claim as
40 submitted to the assessor originally.
41 (3) No informality on the part of the board of equalization shall invali-
42 date any action of the board. The decision of the board of equalization shall
43 be final, except that within thirty (30) days the claimant may appeal to the
44 district court on matters of law, and may appeal the decision of the board of
45 equalization when the board has acted arbitrarily. The claimant shall be noti-
46 fied immediately, in writing, of the board of equalization's action on his
47 appeal to it.
48 (4) Owners seeking deferrals pursuant to this chapter shall apply for the
49 benefits and consent to recapture provisions in the manner provided in this
51 63-1807. DURATION OF DEFERRAL -- PAYMENT AT CESSATION OF DEFERRAL. (1)
52 After the application has been accepted and approved it shall remain in full
53 force and effect until there is a:
1 (a) Transfer of ownership; or
2 (b) Voluntary withdrawal by the property owner(s) of the application or
3 request for cessation of the deferral;
4 (c) Determination by the state tax commission that the information sup-
5 porting the claim is no longer true or the claim or deferral is erroneous.
6 (2) When a deferral ceases, the amount of taxes deferred shall be due and
7 payable, and shall be apportioned as property taxes are distributed during the
8 current tax year. Taxes validly deferred shall not be considered delinquent.
9 However, if the payment of deferred taxes does not occur within one hundred
10 twenty (120) calendar days of the mailing of written notice of the cessation
11 of the deferral, the deferred taxes shall be considered delinquent and all
12 remedies and procedures available to the taxing entities may be pursued.
13 63-1808. PENALTIES FOR FAILURE TO GIVE PROPER NOTICE OF TRANSFER OF OWN-
14 ERSHIP. A claimant who has been granted a deferral pursuant to this chapter
15 and who fails to give notice that a transfer of ownership has occurred shall
16 be subject to a penalty equal to twenty percent (20%) of the amount of the
17 accumulated deferred tax, in addition to the interest and deferred tax owed,
18 for each year in which the claimant fails to give notice.
19 SECTION 2. An emergency existing therefor, which emergency is hereby
20 declared to exist, this act shall be in full force and effect on and after its
21 passage and approval, and retroactively to January 1, 2005. For tax year 2005,
22 a claim pursuant to Section 63-1806, Idaho Code, may be filed until May 15,
23 2005, and county assessors shall accept the claim as if it had been filed by
24 April 15, 2005.
STATEMENT OF PURPOSE
This legislation would provide property tax relief for
homeowners who have lived in their home for ten continuous
years or more. The assessed value of their home would be
frozen as of January 1st of the year they applied and
qualified. They would continue to pay taxes on the frozen
assessed value, at current levy rates, as long as they
remained in the home. Taxes would continue to be calculated
as if there was no freeze, and the deferred taxes would be a
lien on the property.
There is no fiscal impact to the state general fund. There
would be a slight initial shift to other property owners at
the county level, but such a shift would end over time as
deferred taxes began to be repaid.
Representative George Sayler
STATEMENT OF PURPOSE/FISCAL NOTE H 275