New Tax Law Affects Second Homes

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Most second homeowners in the Rim Country will pay an average of nearly $200 more in property taxes next year.

But a lot of primary residents could also pay these taxes if they don’t watch their mailboxes.

A recently mailed notice from the Gila County Assessor’s Office, explains that the Arizona Legislature has eliminated the Less State Aid to Education (LSAE) rebate for most second homeowners.

“We sent out about 1,600 notices in November,” said Larry Huffer, Gila County Assessor.

The deadline for replying to the first notice has passed, but Huffer said a final notice would be sent in early January. If that notice is not sent back to the assessor, the county will reclassify the property based on the information it has on the property.

The Legislature changed the property tax law this year. Owners of second homes, not occupied by a relative may no longer receive the LSAE rebate.

The rebate gives homeowners a break on their school district taxes. The amount may not exceed $600. The county calculates the rate based on 40 percent of a school district’s qualifying primary tax rate. For those living in the Payson Unified School District, the primary school tax rate is 2.646 on every $100 of assessed value.

So, for an average house in Payson priced at $136,000, the tax break from the LSAE would be $178.70.

The state defines a primary residence as the one and only residence where you intend to reside more than nine months of the year. Owners may qualify for one primary residence no matter how many homes they own.

“Typically, if a homeowner uses the address to register to vote and on their drivers license, we consider that their primary residence,” said Huffer.

If a home is used as a vacation home, rented to someone other than family, used as a child care facility, or nursing home, used as a hotel, leased as part of a timeshare, or rented to ranch hands or agricultural workers, it may not qualify for the LSAE.

A second homeowner may also continue to qualify for the LSAE if a relative lives in the home. The state defines a qualified family member as: a natural or adopted child or grandchild; a stepson or stepdaughter; a father or mother, grandparent or great-grandparent; a stepfather or stepmother; a son-in-law, daughter-in-law, father-in-law or mother-in-law or a natural or adopted brother or sister.

‘The Notice of Intent to Reclassify Residential Property asks questions to find out if the primary home residents are legal,” said Huffer.

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