Are You Eligible for a Property Tax Exemption?

You may be eligible for a property tax exemption if you are a senior citizen, a disabled veteran. a military service widow/widower or if you owner occupied a residential property which was at least 50% destroyed by fire.  These are just a few of the exemptions that may reduce your 2021 property tax bill.  The application for the exemption must be received or postmarked by March 15 of the year the exemption is sought. The application is online at the MOA Assessor’s Office.

You may not know that according to Anchorage Municipal Code 12.15.015, twenty percent of the assessed value of an owner occupied residential property, up to a maximum of $50,000 of assessed value, shall be exempt from property tax. If a change in ownership, property use, or permanent residency is changed, the failure to notify the city may result in loss of the exemption retroactively, including payment of back taxes, penalties and interest.   To qualify you must be the owner of the property prior to January 1, 2021 and you must have resided in  Alaska for the entire 2020 year. It must be your primary residence and permanent place of abode and when absent, the dwelling is not to be leased or rented to another.  So be advised, snowbirds! 

Although there are many exemptions available to help reduce Anchorage’s higher than average property taxes for a community our size, one change that has been implemented by the MOA is that any change of ownership must now be declared.  In the past, a change of ownership that allowed deductions was not always identified by the MOA.  A good example of skirting the requirements would be if a senior sold to a younger family member with the same last name.  The senior citizen exemption is up to $150,000 of the assessed value as long as the permanent resident is 65 years of age or older or at least 60 years old who is the widow or widower of a person who qualified as a Senior.   The disabled veteran exemption is also up to $150,000 of the assessed value.

Many properties in Anchorage are owned by non-profits which are totally exempt from property taxes.  You might be surprised to know that nonprofit religious, charitable, cemetery, hospital, educational or community purposes are all exempt.  In some instances, these non-profits are housed in residentially zoned districts.  Your next door neighbor may be exempt if they are also operating a non-profit. It is also interesting to note that organizations receiving  these exemptions are NOT required to file the annual exemption certification with the Assessor’s Office.        

Aside from individual ownership deductions and nonprofits, there are exemptions available to businesses and developers to help boost our local economy. Businesses with a value of $20,000 or more need to file a report identifying its personal property in order to obtain an exemption. Taxpayers with multiple locations are eligible for only one $20,000 exemption.  A more significant exemption is the new subdivision property tax incentive for newly created subdivisions from a single parcel into three or more parcels and any improvements made to the property necessitated by the subdivision prior to a sale or transfer.    In other words, the developer’s lots are taxed pro rata based on the assessed value of the whole tract and not on the improved lots until the lots are sold. This is a savings of approximately $1,200 per lot per year until the lot is sold.  This  helps keep the cost of the lot more affordable which is ultimately passed on to the builder and homeowner.  With the high cost for lumber and rising costs for subcontractors, this  is helping moderate the differential between resale and new home costs.

There is also a Downtown Housing Incentive Application  for exemption of new residential units, providing a minimum of four new residential units are constructed within the Central Business District. This incentive program has many negotiated facets and any application must be made in writing to the Chief Fiscal Officer prior to construction which means much is left to negotiation.               

As always, I thank you for your referrals. Feel free to give me a call or text me at 907-229-2703.