In Idaho, property taxes are calculated from the budgetary needs of each taxing district. These taxing districts include cities and counties, schools, highways, fire protection and several others.
Each year officials within each taxing district determine their annual budget needs to provide the district’s services. The part of the budget that will be funded by property tax is divided by the total value of all properties located within the district. This number provides the levy or tax rate that will be applied to the taxable value of each property in the district and will determine the amount of property taxes each homeowner will pay to that district. Since each property is located within numerous taxing districts, the property tax billing includes taxes from each district.
Taxing districts other than schools are limited in their ability to increase their budget and therefore, property taxes. The limit is an annual cap of 3 percent plus an allowance for growth based on the value of new construction and annexation which occurred during the prior year.
- 2006 Urban 1.21% average
- 2005 Urban 1.57% average
- 2006 Rural 1.784% average
- 2005 Rural 1,125% average
Idaho has two ways to reduce property taxes. Owner occupied homes and manufactured homes, which are also primary residences, qualify for a “Homeowners Exemption”. This exemption allows for a 50% reduction in value up to $89,325. (2007) and up to $100,938. (2008 and subsequent years).
The other property tax reduction is in the form of the “Circuit breaker”. This program may reduce property taxes on your home and up to one acre of land by as much as $1,320. To qualify each year you must:
1. Have owned and lived in the home or mobile home in Idaho as your primary residence before April 15, of that year.
2. Had income of $28,000 or less for the previous year
3. Meet one or more of the following status requirements as of January 1st of the current year
- Age 65 or older
- Fatherless or motherless child under 18 years of age
- Former POW/hostage
- Vet with 10% or more service-connected disability or receiving a pension from VA for non-service-connected disability
- Disabled as recognized by the SSA, Railroad Retirement Board or Federal Civil Service
For more information, visit the Idaho Tax Commission website.
Currently, Idaho has a 6% sales tax on all goods purchased within the state. The legislature has been working to reduce or eliminate this tax on grocery purchases.
Idaho has a graduated personal income tax so wage earners pay more as their income increases. The personal income tax rate begins at 1.6% with a upper level of 7.8%. The rates are adjusted annually for inflation. Idaho residents pay Idaho income tax even if their income is earned out-of-state.
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