Most Boiseans’ tax bills will go up next year, even though the city’s levy will go down.
That’s because most of the city’s tax base growth is a result of rising property values.
People who own property whose value increased significantly will pay more. People in homes and businesses with decreasing or slightly increasing value will pay less.
The city is estimating its future tax rate as it works on its budget for next year. The city expects property taxes to yield $129,036,491 for the budget year that begins Oct. 1. That’s about $6.5 million more than the year before.
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Calculating the break-even point for residential property is tricky because of Idaho’s homeowner’s exemption. The exemption reduces the taxable value of a home by half, with a maximum reduction of $89,580, if the owner lives in it. Property taxes would stay flat for the owner of an average Boise home — appraised at $207,000 — if its value increased by 3.5 percent over the past year, city budget experts say. A bigger increase would mean a bigger tax bill, and a decrease or smaller increase would reduce taxes.
Overall, Boise home values increased about 7 percent last year, according to the Ada County Assessor’s Office.
Boise’s new levy, or tax rate, is expected to come in at .007398699 — approximately 1.14 percent less than last year, according to the most recent estimates coming out of the city’s budget office. That means your tax bill would be $739.87 for every $100,000 in taxable value.
If tax receipts are going up, how can the tax rate go down? The answer is that, due to economic improvement and annexations, the increase in Boise property values outpaced budget growth.
In 2014, Ada County put the taxable value of all property inside Boise city limits at $16.36 billion. This year, that number is $17.44 billion. The more than $1 billion property value increase will allow a decrease in the levy.
According to the budget office, new construction accounted for almost 29 percent of the property value increase. Annexed properties accounted for about 10 percent.
The City Council is scheduled to hold a budget hearing July 21. It could finish the process of certifying the budget by early September.