The amendement 1, of the tax relief package, passed about two weeks ago and contains a number of revisions. The three "biggies" are: PORTABILITY of homestead property tax assessments, DOUBLING the homestead exemption, and CAPPING the increase in assessed value of non-homesteaded property.
PORTABILITY- Portability means the owner of a homesteaded residential property can transfer the difference between their market value and assessed value to a new homestead property purchased within two years of the date they sold the old property. There is a $500,000 limit on the difference in value that can be transferred. Residents who closed the sale of their homesteaded property after January 1, 2007 qualify for portability.
Example, you purchased homesteaded property in 2000 for $160,000. Its present assessed value is $175,000 even tough its market value is $300,00. The difference between its assessed value and market value is $125,000. If you sell and then purchase a new homesteaded property for $300,000, the assessed value on your new property will be $175,000, the same as the one you sold. If, instead, the new property cost $400,000, your assessed value would be $275,000 (the $175,000 from your old property plus the $100,000 you paid in excess of your selling price).
There is no limit on how many times you can use "Portability" from one property to the next. The form to apply for Portability is available on the Property Assesor's website http://www.bcpa.net/.
It is possible that a legal challenge could alter or eliminate this new Portability provision, but property owners who applied for and received the benefits of Portability prior to a court's ruling would most likely not be affected.
DOUBLE EXEMPTION. AMENDMENT 1 also "doubled" the $25,000 homestead exemption that has been in place for years for $50,000. However, it exempted the public school portion of the tax bill. The result is that the average property owner will see a reduction in their tax bill for 2008. This new exemption amount will be automatically applied to homesteaded properties.
RENTAL AND SNOWBIRD CAP -The Cap applies to non-homesteaded properties like vacation homes, rentals and commercial property. It caps the increase in their assessed value to 10% annually beginning in 2009 (2008 is the "base" year , so the cap will not appear until 2009 tax bills). This operates exactly like the 3% cap on homesteaded properties.
Note: This information is only intended to give an overview of these tax issues. Please refer specific questions to the Tax appraiser or other Tax professional.