Evaluating Your Property Tax Assessment

Every year on January 15^th, the Municipality of Anchorage is required to mail assessment notices to property owners for all taxable property. That date begins a 30-day appeal period. Feb. 29^th is the last day to submit evidence for appeals and during Mid-March to June, the Board of Equalization, consisting of private citizens, hears the appeals. Very few property owners actually file a formal appeal and most minor appeals are handled at the counter which is efficient and friendly, given all the circumstances.

Perhaps, what is most important is how the valuation occurs in the first place. The MOA is required to physically inspect every property at least once every six years which becomes a year round re-inspection process for the staff. September through December is when they do new construction inspections and valuations. An interesting anecdote is that some land developers actually wait to file plats for completed subdivisions until after the first of the year in order to pay taxes on undeveloped land instead of fully improved lots. Sixty-five percent of the property tax base is residential. Twenty-seven percent is commercial and eight percent is personal property. The geographical area taxed includes south of Portage, north to Eklutna, the Anchorage Bowl and parts of Cook Inlet and Turnagain Arm. Within that jurisdiction, the commercial definition includes fourplexes, hotels, apartments, retail, industrial and office. Although there is no actual data on what type of properties receive the most appeals, either informally or through the appeal process, one can surmise that higher dollar properties, like commercial, would be most likely to make a formal appeal.

What you might be surprised to know is that there are mandatory exemptions from property taxes required by Federal and State Governments. Those exemptions include cemetery, charitable, educational, hospital, religious, disabled veterans, senior citizens, housing authorities, native claim, veteran organizations and fire protection systems. Optional exemptions enacted at local levels may include business personal property, disabled veterans, widow/widower of active military service connected death, charter schools, community purpose, economic development and residential owner occupants. The most controversial, however, is a tax free abatement on deteriorated properties. Why a property that is an eye sore to the community should pay no property tax is a mystery most likely to everyone except a few politicians who approved the tax free status.

Senior citizens have 24% of the total exemptions followed by the municipality with 19%. Residential has 12% and the state and federal has a total of 15%. Just keep in mind that any new state, federal or MOA building does not contribute to the tax base and in some cases takes away current tax revenue when previously taxed land or buildings are put to a new tax free use. Most real estate professionals have acknowledged that the 2016 market was flat, at best, with small pockets of de-valuation in certain categories. Hopefully, the MOA tax assessor’s office views the market the same way with no increase in property taxes.