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In Case You Missed It – New Law for 2021 Affects Homeowner Tax Exemption

Earlier this year, the Idaho Legislature passed several new laws that affect Idaho homeowners. One of the laws deals with the removal of the Homeowners Exemption Application Deadline.

Homeowners in Idaho can take advantage of a property tax exemption as long as they occupy the home as their primary residence. The exemption affords homeowners a tax break of 50% of the house’s value and up to one acre of land from property tax. There is a maximum exemption of $100,000. For instance, if the home and property’s assessed value is $350,000, then the taxable value is $250,000.

Before the application deadline legislation, the deadline was April 15 of the current tax year. The new homeowner had to wait until the following year to apply for the exemption for properties that were purchased after the deadline and did not currently have an exemption.

Starting next year (in 2021), exemption applications will be processed based on the tax exemption application’s date. There are a couple of things to consider:

  • Suppose the purchased property did have a homeowner’s exemption. In that case, the new owner can still apply and receive the exemption for the balance of the year after the county has accepted the application. The new homeowner must apply for the exemption upon closing, as any delay will reduce the time the exemption is in place for the year of the transaction.
  • If the property purchased is a new construction home, there is a 30-day deadline to apply to reduce the occupancy tax for the first year. After the calendar rolls over to the next month, the property is added to the county tax rolls as it usually does.

The most important thing to remember with this law is to apply for the exemption as soon as possible after closing. The state will not retroactively backdate applications that are filed a month or two after closing. As a result, the homeowner will miss out on some of that tax savings.

Photo Credit: Prasertthai


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