Idaho House OKs bill to end indexing of homeowner exemption


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BOISE, Idaho (AP) — Idaho homeowners would face a cap while claiming their property tax exemption in a new bill that passed the Idaho House on Tuesday.

House lawmakers voted 55-15 to fix the maximum homeowner exemption at $100,000.

"The current system is inherently unstable," said Rep. Janet Trujillo, R-Idaho Falls. "This bill will make our system a little bit better."

State law allows qualified homeowners to claim the property tax exemption for their primary dwelling and up to one acre of land. The exemption is for 50 percent of the assessed home value, up to the maximum exemption limit.

Currently, the exemption rate is based on the Idaho House Price Index published by the Federal Housing Finance Agency. This year's exemption is just under $95,000. While it's lower than the bill's proposed $100,000, the system allows for the exemption to grow or fall with the housing economy.

Idaho has offered some sort of homeowner property tax exemption since the 1980s. The exemption rate peaked to a high of $104,471 in 2009, but then fell to $81,000 four years later because of the economic downturn.

The bill is back by the Idaho Association of Realtors, a prominent group that told lawmakers at the beginning of the legislative session that the average sale price in Idaho hovered right below $200,000 in 2015.

Trujillo played down that number while debating the bill Tuesday. Instead, she listed counties besides Ada County — Idaho's most populated county with some of the highest home values— with average home prices closer to $150,000.

"We're not just looking at small pockets of Ada County. We're talking statewide," she said.

However, Democratic Rep. John Gannon of Boise argued the measure only ensures higher taxes for middle class homeowners.

"When inflation increases the value of your home to more than $200,000, you will not have the benefit of a higher exemption, so you will essentially have a higher tax," he said.

Five Republicans and 10 Democrats voted against the bill.

The measure now heads to the Senate.

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