KINGMAN - Mohave County Assessor Ron Nicholson is seeking out residential property owners who may have their property reclassified this year and lose a state-aid tax-credit due to a new law.
The new law effects residential properties that are currently classified as primary residences but are being used as rentals or vacation homes or are foreclosed bank-owned homes. Residential properties are classified in many different ways, Nicholson said, but there is one classification for residential properties that are the primary residence of a property owner and other classifications for rental homes, vacation homes, home businesses, etc. Properties classified as residential are charged a different tax rate than those classified as commercial or vacant land, he said.
The law would take away a tax credit that these homes receive because they are currently classified as primary residences. The law does not effect taxes on homes that are actual primary residences.
In order to prove a home is a primary residence, the property owner will have to fill out and return an affidavit, which will be mailed out in the January 2012 notice of valuation, stating that the home is primary residence.
Nicholson said there are a total of 107,000 homes in the county, 60,000 are classified as primary residences, 46,000 are classified as rental or vacation homes, 27,000 homes are owned by people who live outside of the state and 3,000 are foreclosures that are owned by banks or homes with multiple owners.
Nicholson said his office is trying to give people who may be at risk of losing the state-aid tax-credit a heads-up this fall by issuing a notice of change to those property owners in September. He is hoping those primary residence owners who receive these changes of notice will contact his office and appeal the change.
If they don't appeal the change, then the home will be reclassified as a rental or vacation home and the owner will lose the tax credit, which could increase their taxes by $100 to $600 a year.
Primary residence owners who receive a notice of change letter from the Assessor's Office and do not appeal will not receive a copy of the affidavit that will be mailed out in the January 2012 notice of valuation, Nicholson said. Those affidavits will only be mailed out to properties that are classified as primary residences.
Everyone who receives an affidavit with their January 2012 notice of valuation needs to fill it out and return it within 30 days, he said. Otherwise their property will be reclassified as a rental or vacation home, and they will lose their state-aid tax-credit. Nicholson estimates that 50 percent of residential property holders who receive an affidavit (around 30,000 people) will not return their forms because they've misplaced it, forgotten about it or lost it. He said he plans to have stacks of the form available in his offices and online in January for those home owners who may have misplaced theirs.
The new law is expected to generate around $39 million in revenue for the state. It will also lower the property tax rate for commercial property in 2013 and vacant land in 2016.
The hope is that the decrease in property taxes to businesses will reduce their costs and encourage them to invest the savings in expanding their business and hiring new people, Nicholson said.
Arizona Rep. Nancy McLain and Doris Goodale voted in favor of the bill saying it won't increase taxes on homeowners and should encourage business growth and retention.
Arizona Sen. Ron Gould had expressed concern that the increase in property taxes on rental properties will be passed on to the renters living inside them.