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Idaho’s Homeowner’s exemption for Real Properties

By: Auriana Clapp-Younggren

Did you know that Idaho law provides a tax benefit for Idaho homeowners?  The homeowner’s exemption allows Idaho property owners to receive a tax break on their primary residence if they meet certain qualifications. The exact impact of your tax exemption will depend on the value of your home each year, taxes levied with your district, location of the property, size of the land, quality of the home, among many other factors. The homeowner’s exemption is normally applicable to your primary residence and cannot be obtained for other properties you own in Idaho. However, with the proper estate planning, some individuals who own more than one residence may be able to apply this additional tax break to other properties.

Obtaining Multiple Homeowner’s Exemptions

If you own more than one parcel of real property, then you likely know that the homeowner’s exemption only applies to your primary residence. However, the law has recognized an exception to this rule.  A trust, if appropriately structured, may help you qualify other real properties to receive the homeowner’s exemption. Essentially, if a beneficiary of your trust resides in the real property, then such property may also receive the tax exemption. The most common situation occurs is when a parent permits a child to live in real property that is owned by a trust. If the child is also a beneficiary of the trust, whether a present or future, then the assessor will apply, upon proper application, a second homeowner’s exemption to the real property the child is living in. The basis for this reasoning is grounded in Idaho’s broad definition of “beneficiary” of a trust as a permitted owner of the qualifying property. The real properties must be owned by a trust for this process to be effective. The beneficiary does not have to be a child or relative – essentially any individual living on the real property who is a beneficiary of your trust may qualify to receive an additional homeowner’s exemption on such residence. 

Additional Facts About the Homeowner’s Exemption

  • The homeowner’s exemption will exempt the first fifty percent (50%) of your residence or $94,745.00, whichever is less, from taxes. The exemption is adjusted annually.

  • The homeowners exemption will also include manufactured homes, including up to one (1) acre of property.

  • You must own or occupy the home prior to April 15th in order for the homeowner’s exemption to apply that year.

  • The homeowner’s exemption can apply to real property where the owner is not only a trust, but also a partner of a limited partnership or a member of an LLC.

  • The Assessor’s office offers a Property Tax Reduction Program where the state will pay a portion of your real property taxes with no expectation of repayment. In order to qualify for this Program, you must either be: (1) age 65 and up; (2) widow(er); (3) blind; (4) a former prisoner of war; (5) a minor without parents; or (6) a qualified disabled individual.

This article is not intended to replace legal advice applicable to your situation and should be used only for informational purpose.  Consult with your legal or tax advisors before implementing any suggestions contained herein.

Ms. Clapp-Younggren is an associate attorney with the firm of Sandra L. Clapp & Associates, P.A. and can be reached at aclapp@clapp-legal.com or (208) 938-2660.
 
 
 
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