Homeowners getting tax break

Posted: Wednesday, February 23, 2005

Nearly 8,400 Kenai Peninsula Borough homeowners have applied for the increased property tax exemption approved by voters last fall.

In the past, a total of between 8,600 and 8,700 applied for the exemption, borough assessor Shane Horan said.

In October, peninsula voters approved raising the allowable property tax exemption from $10,000 to $20,000.

Horan said the borough sent application forms for the new exemption to all property owners who had previously qualified for the $10,000 exemption.

The deadline to complete and return the application was Jan. 15, but the borough mayor has the authority to grant extensions to people who submit late-file waiver forms, Horan said.

What the exemption means is the owner of the residential real property is exempt from taxation on the first $20,000 of the property's assessed value, as long as the property is the owner's permanent place of residence in the borough.

Horan said the borough tax code can accommodate "snow birds," those seasonal residents who split their residency between Alaska and warmer climes in winter, as long as the homeowners spend at least 183 days using their borough home as their primary residence.

If the homeowner is away from his or her borough home longer than six months, for medical reasons, he or she may still qualify for the exemption, according to Horan.

The fiscal impact of the $20,000 exemptions on the borough annual tax revenue is projected to be $913,717.

Of that total, the road service area will lose $84,473, Central Emergency Services will lose $80,774, the Central Peninsula Hospital Service Area will lose $58,632 and the South Peninsula Hospital Service Area will lose $38,684.

Revenue losses in other borough service areas include Nikiski Fire, $20,044; Kach-emak Emergency Services, $11,325; Anchor Point Fire-Emergency Medical Services, $9,006; Kenai Peninsula College, $8,881; North Peninsula Recreation, $8,715; Bear Creek Fire, $6,482; Central Peninsula EMS, $5,210; Seward-Bear Creek Flood, $2,911; Nikiski Seniors, $1,145; and Lowell Point Emergency Services, $245.

The borough is planning its budget and according to Finance Director Scott Holt, "We have been coming up short as we have in the past few years.

"We're looking at possibly making cuts in general operating expenses where we can, and we don't know what the (borough) assembly will do," he said.

The assembly has discussed alternate ways of increasing revenue, such as an increase in the mill rate, enacting a bed tax and possibly increasing the sales tax cap from $500 to $1,000, meaning the borough sales tax would apply to the first $1,000 of an item's purchase price rather than only the first $500.

"The assembly is looking at all the options. Nothing has been decided at this time," Holt said.

The new $20,000 tax exemption, which took effect Dec. 31, applies only to borough property taxes and not to property taxes imposed by the incorporated cities of the borough.

Horan said the application process has "been going relatively smoothly" for those seeking the tax relief.

The assessor said his office is questioning applications, particularly if the applicants have an address that is out of town either because they are temporarily out of state or they just purchased the property this year and did not own and occupy it for 183 days in 2004.

To qualify for the exemption, homeowners need to complete the application only once. There is no need to reapply each year, Horan said.

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