Are you taking full advantage of the homeowner tax exemptions that are available to you? Sometimes when your home is held in the name of a Living Trust, property tax exemptions are lost or forgotten.
How Exemptions Work
A residential real estate property tax exemption can reduce the amount of assessed value of your home that is subject to tax. For example, if your home is assessed at $250,000 and you receive an exemption of $150,000, property taxes will be calculated on the remaining $100,000 of assessed value.
Because state law permits each taxing authority to enact exemptions at its discretion, the rules are very different depending on where your home is located. Here is a brief review of the exemptions currently available for the Municipality of Anchorage, the Mat-Su Borough, and the Kenai Peninsula Borough.
Municipality of Anchorage
Residential Exemption: This exemption applies to property used as your primary residence for at least 185 days of the year prior to the year for which the exemption will apply. You must also have been a resident of Alaska for that entire calendar year. The exemption is for 10% of the assessed value, up to a maximum
of $20,000, and only one exemption may be applied to a property (a married couple cannot receive two
exemptions). You may apply for this exemption in addition to either the Senior or the Disabled Veteran Exemption.
Senior Exemption: One exemption in the amount of $150,000 is available if you were at least 65 on December 31 of the year prior to the tax year for which you apply. You must also have owned and occupied the property as your primary residence and been a resident of Alaska for the entire year prior to the exemption year. If your deceased spouse qualified for the exemption and you are at least 60 years old, you qualify as well.
Disabled Veteran Exemption: You are entitled to this $150,000 exemption for your primary residence if you are a Disabled Veteran. Again, you qualify if your late spouse received this exemption and you are over age 60. You are required to have been a resident of Alaska and have occupied the property for the entire prior year. In addition, this exemption requires submission of a letter from the VA (dated on or before December 31 of the preceding year) stating at least a 50% service-connected disability. If the letter does not indicate that your disability is permanent, you must submit an updated letter each year.
You may receive either the Senior or the Disabled Veteran Exemption, but not both. If you qualify for both, we recommend applying for the Senior Exemption because less additional documentation is required.
Disaster Exemption: Hopefully, you will never be qualified for this relief. It is available for a residence that is at least 50% destroyed by fire. You must apply within 60 days of the fire by contacting the Municipal Assessor’s Office.
Residential Exemption: The Mat-Su Borough does not presently have a residential exemption. A residential exemption may be considered if a borough sales tax is enacted in the future.
Senior Exemption: The rules, requirements, and exemption amount for the Seniors’ exemption in the Mat-Su Borough are the same as for Anchorage.
Disabled Veteran Exemption: The Mat-Su Borough also applies the same rules, requirements, and exemption amount for this exemption as the Municipality of Anchorage. Again, you must file every year if your disability is not permanent.
Kenai Peninsula Borough
Residential Exemption: The Kenai Peninsula’s Residential Exemption is a flat $20,000. To qualify, you must own and have occupied the property (or a mobile home) as your permanent place of residence for at least 183 days during the previous year. If you have not owned the property that long, you must intend to live there for at least 183 days of the year you apply and future years. If medical issues prevent you from living in the home for 183 days, you may apply for an exception.
Senior Exemption: The Borough exempts up to $300,000 of assessed value for senior citizens. Some cities, however, exempt only $150,000. Therefore, if you live within the city limits of Homer, Kenai, Soldotna, Seldovia, or Seward, the city portion of your tax bill will receive the $150,000 exemption and the borough portion will receive $300,000. To qualify, you must meet the same age requirements as for the Anchorage Senior exemptions. You also must qualify for a PFD.
Disabled Veteran Exemption: The same rules and requirements apply to this exemption as to the Anchorage and Mat-Su Disabled Veteran Exemptions. The borough exemption of $300,000 is applied with a $150,000 limit for city taxes in some cities, as for the Borough’s Senior Exemption. You may not receive both the Senior and the Disabled Veteran Exemptions.
Disabled Resident Exemption: If you do not qualify for either the Senior or Disabled Vet exemption, but have been determined to be totally disabled for Social Security, Civil Service, or certain retirement system purposes, you may qualify for a $500 reduction in taxes. Applications must be submitted every year.
Volunteer Firefighter-EMS Provider Exemption: If you are an active volunteer firefighter or someone who provides emergency medical services, you may receive an additional $10,000 exemption. Up to 2 such exemptions are permitted per household.