Senior exemption changes in 2008

Posted: Thursday, October 18, 2007

Senior property owners in the Kenai Peninsula Borough recently received notification of new residency rules they must begin meeting in January if they are to be deemed eligible for the borough's property tax exemption above that mandated by the state.

The new residency requirements also affect disabled veterans and their surviving spouses.

Beginning Jan. 1, the following provisions of Ordinance 2006-21 will apply to residents 65 years and older or residents at least 60 years old who are the widow or widower of a resident 65 years or older.

To be eligible for the state's exemption on the first $150,000 of assessed value on a person's primary residence, that person must be eligible for an Alaska Permanent Fund dividend for that tax year or the preceding year. It is not necessary to actually apply and receive a dividend, only that the person meets the permanent fund's residency requirements.

Until voters approved 2007's municipal Ballot Proposition 1 on Oct. 2 capping the senior tax exemption at the first $300,000 of assessed value, the borough's exemption was unlimited. The new cap will take effect in tax year 2008.

Somewhat different residency requirements govern eligibility for the borough's exemption.

Residents must have resided in the borough for at least one year prior to the year for which they are seeking an exemption. Further, a person cannot have been absent from the borough for more than 120 days during the previous year unless evidence is provided showing why a lengthier absence was necessary.

Those reasons are spelled out under a state statute delineating absences allowed under Permanent Fund eligibility rules. They include such things as attending college full time, receiving vocational, professional or other specific education full time where equivalent programs are not available in Alaska, serving on active duty in the military, receiving continuous medical treatment, providing care for a parent, spouse, sibling, child or stepchild suffering a critical life-threatening illness, serving in Congress or on the staff of a member of Congress. For the complete list, see AS 43.23.008.

Under the borough law, the assessor may presume a property has not been occupied as a primary residence and permanent place of abode if an applicant was absent from the borough longer than 120 days without an excuse.

While 120 days may appear short, and it is compared to the 183 days allowed currently, provisions in the ordinance may permit longer absences.

Proposition 1's cap limiting the borough's tax exemption to the first $300,000 of assessed value only applied to seniors and their surviving spouses. The Kenai Peninsula Borough Assembly voted against including disabled vets or their spouses under the cap provision.

Thus, the primary residences of disabled vets and their surviving spouses remain fully exempt from property taxes regardless of their value.

Hal Spence can be reached at

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