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Golden Years Homestead Property Tax Freeze Act

Golden Years Homestead Property Tax Freeze Act. A PROPOSAL FOR SENIOR & DISABLED VETERAN HOMEOWNER PROPERTY TAX RELIEF. KS State Senator Tom Holland October 15th , 2019. Presentation Agenda. KANSAS PROPERTY TAXES – A HISTORICAL PERSPECTIVE THE PURPOSE OF PROPERTY TAX CIRCUIT BREAKERS

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Golden Years Homestead Property Tax Freeze Act

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  1. Golden Years Homestead Property Tax Freeze Act A PROPOSAL FOR SENIOR & DISABLED VETERAN HOMEOWNER PROPERTY TAX RELIEF KS State Senator Tom Holland October 15th, 2019

  2. Presentation Agenda KANSAS PROPERTY TAXES – A HISTORICAL PERSPECTIVE THE PURPOSE OF PROPERTY TAX CIRCUIT BREAKERS OVERVIEW OF CURRENT KANSAS PROPERTY TAX CIRCUIT BREAKER LAW OVERVIEW OF “GOLDEN YEARS HOMESTEAD PROPERTY TAX FREEZE ACT” QUESTIONS & ANSWERS

  3. Kansas Property Taxes – A Historical Perspective • Pre-1930’s: gov’t primarily relies on property taxes • 1933: Individual, Corporate income taxes enacted • 1937: Kansas Retailers’ Sales Tax enacted • 1940’s – 1980’s: Broadening continues with adoption of privilege, gross receipts, and severance taxes • 1970’s - Cities and counties given authority to impose local sales taxes • 1986 – Kansas adopts property classification amendment / state subsequently conducts first property reappraisal in more than 20 years (effective TY 1989)

  4. What are Property Tax Circuit Breakers? • Protects taxpayers from a property tax “overload” like an electric circuit breaker; when a property tax bill exceeds a certain percentage of a taxpayer's income, the circuit breaker reduces the property tax amount • Targeted to selected income groups: • Circuit breakers help offset the unfairness of a regressive property tax by identifying the individual taxpayers for whom property taxes are most burdensome • Much less expensive than “across the board” property tax breaks like homestead exemptions or tax caps • In 2018, 18 states and DC offered property tax circuit breaker programs (ITEP – Institute on Taxation and Economic Policy)

  5. Overview of Current Kansas Property Tax Circuit Breaker Laws • Homestead Property Tax Refund Program (K40H) • KS resident for entire claimed tax year • Total household income $35,000 or less • 55 or older OR totally and permanently disabled or blind OR supporting a dependent child • “Safe Senior” Act (K40PT) (Ages 65 and older) - > 75% rebate on general property tax bill • KS resident for entire claimed tax year • Total household income $19,800 or less for 2018 • For homesteads appraised at for $350,000 or less

  6. Homestead and SAFESR ProgramsTax 2017 Fiscal Note

  7. Overview of Golden Years Homestead Property Tax Freeze Act (SB 104) • A “de facto” homestead property tax freeze for qualifying senior and disabled veteran homeowners as well as disabled veteran renters • Particularly benefits qualifying homeowners in: • Areas experiencing continued rising appraisal values • Areas experiencing diminishing property tax bases • Areas undergoing annexation • Does NOT require a constitutional amendment • Does NOT in any way adversely impact the tax base of local units of government

  8. Golden Years Homestead Property Tax Freeze Act - The Details • Allows certain qualifying Kansas seniors age 65 or older or 50% permanently disabled veterans to make application to the Kansas Department of Revenue (KDOR) to “freeze” their homestead property tax liability • Homestead appraisal value $350,000 or less • Annual household income $50,000 or less

  9. Golden Years Homestead Property Tax Freeze Act - The Details (2) • Qualifying homeowners: • annually make full payment on their property tax bill to the county treasurer • receive a fully refundable rebate check from the KDOR for the difference between their current year property tax bill versus their property tax liability for the tax year in which their property taxes were “frozen”

  10. Golden Years Homestead Property Tax Freeze Act - The Details (3) • The homeowner would have to make separate application via K40 for each year he/she wanted to claim difference versus their “frozen” property tax liability • A provision has been made for the surviving spouse (provided he / she is residing in the homestead) to continue participating with the refund program

  11. Golden Years Homestead Property Tax Freeze Act Timeline Nov 2018 Dec 20th2018 May 10th2019 Nov 2019 Dec 20th2019 Apr 15th2020 May 10th2020 May 2020

  12. Golden Years Homestead Property Tax Freeze Act – Fiscal Note

  13. Golden Years Homestead Property Tax Freeze Act • Questions?

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