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Property tax relief coming soon?

Friday, June 20, 2008

Residents across the state, including Clay County, will begin to feel the effects of property tax relief next year.

As part of the passage of House Bill 1001, a Circuit Breaker was placed into effect, giving residents a break on their property taxes.

However, since it was passed, residents have been scratching their heads, wondering how exactly it works.

In years' past, an individual with a home with an assessed value of $100,000 and a property tax bill of $2,300 would have to pay the entire amount.

Under the current legislation, this individual will be helped significantly.

"Naturally, with most of the credits having a set amount that can be deducted, homes with a higher assessed value will end up receiving a bigger Circuit Breaker credit," Clay County Auditor Mary Jo Alumbaugh said.

With a cap of 1.5 percent of a homestead property's gross assessed value in 2009, the individual will have to pay a maximum of $1,500 in property taxes. The break is even more in 2010 when the cap drops to 1 percent and the individual's property taxes also drops down to $1,000.

"While property tax bills are based on the net assessed value, after all credits and exemptions have been subtracted, the Circuit Breaker is based on the gross assessed value," Alumbaugh said.

Also as part of the bill, the state will begin to assume costs previously paid by taxpayers, including the remaining 15 percent of school operating costs, police and fire pensions, costs of juvenile incarceration in state facilities and child welfare levies.

"Starting next year, residents will no longer have different tax rates, like the school and welfare rates, included in the calculation of their respective district tax rates," Alumbaugh said.

While residents will have a lighter property tax bill, civil and community aspects will feel the effect the most.

"Most projects have a fixed rate, but with the Circuit Breaker, they won't be able to collect all the dollars," Alumbaugh said. "Everyone who receives revenue from property taxes will be hit the most."

This year, the Circuit Breaker is only affecting residential properties. With the maximum set at 2 percent, the majority of Clay County residents will not be affected.

However, as the maximum drops in the next couple of years, residents can anticipate some relief, but cannot see it as a guarantee.

"As it is right now, there will be a small effect next year and a bigger one in 2010, but still not as much as in other counties," Alumbaugh said. "Also, we never know how the legislation will change from year to year, so any projections at this time would be pure speculation."


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The headlines property tax relief coming soon?

Naturally, with most of the credits having a set amount that can be deducted, homes with a higher assessed value will end up receiving a bigger Circuit Breaker credit," Clay County Auditor Mary Jo Alumbaugh said.

However, as the maximum drops in the next couple of years, residents can anticipate some relief, but cannot see it as a guarantee.

"As it is right now, there will be a small effect next year and a bigger one in 2010, but still not as much as in other counties," Alumbaugh said

Does this mean those with higher assessed values will receive the cut and that is guaranteed, those with less will pay more?

Not sure.

-- Posted by Pearl2083 on Tue, Jun 24, 2008, at 12:11 PM


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