By Nick Worth
Some property owners in Navajo County were faced with a higher tax bill in 2012 and even more may see a change in 2013.
The reason for the changes is that many owners of more than one home had to choose one residence as their “primary residence,” and so have found their second homes are no longer eligible for the homeowner tax credit.
These secondary homes have been reclassified from “primary residence” to a second home status for the 2012 and now the 2013 tax years, according to the Arizona Department of Revenue (ADOR).
In 2011, the Arizona State Legislature passed a bill changing the homeowner property tax credit to apply only to the property which is the primary residence. The tax credit was intended to partially offset education taxes paid by the homeowners.
In the past, the homeowner’s tax credit applied to all residences owned by an individual, excluding rentals, because there was no “primary residence” designation in place.
So, if a homeowner had two homes, one a vacation or summer home, the tax credit could be claimed on both. Now the “non-primary residence,” as the assessor’s office refers to a second home, is not eligible for the tax credit.
Prior to 2012, both rental and primary residence properties were assessed at 10 percent, but rental properties did not get the tax credit. That still holds true today.
Homes costing a lot can receive a tax credit up to the capped limit of $600, but the figure given as a credit is based on the valuation of the home and can be less than $100 in some cases.
There is one exception to the rule of rentals not being eligible. The statute also allows some family members of the homeowner to be considered primary residents if they are renting from the homeowner.
“Parents, siblings, in-laws and your children can all qualify as primary residents for the tax credit,” said County Assessor Cammy Darris. “Obviously, your second cousin twice removed won’t qualify. It has to be an immediate family member.”
According to figures from ADOR, in Navajo County alone the move by the county assessor’s office to reclassify 755 properties, has brought a savings to the state of $118,953.
Darris said those numbers are on the low side.
“We probably reclassified between 750 and 1,000 by the time we were done,” she said.
“We have a lot of secondary homes in Pinetop and Heber, so it saved the state a lot of money,” she said of the reclassification.
The assessor’s office gathers information on properties in a couple of different ways.
Owners have to sign an affidavit of sale on the purchase of a property, which indicates if they’re going to live in it or rent it, or what other use they will put it to.
Also, the assessor’s office contacts property owners regularly.
“Every four years we send out a notice to property owners,” said Darris. “We’re required to verify how the house is being used.”
Darris noted the reclassification process is not a one-time thing.
“It’s an ongoing process,” she said.
By Nick Worth