Alaska is the largest state in our country with approximately 321 communities but only 165 are incorporated. In turn, out of those 165 communities, only 19 incorporate into boroughs that are equivalent to counties, and the rest are incorporated as cities. Then, from the 19 districts, only 15 collect a property tax. Consequently, the Alaska property tax rates are some of the highest in the country.
In the rest of the country, the average is 1.07%, while in Alaska the average effective rate is 1.8%. For this reason, the government of Alaska collects large amounts of money from this type of income. In 2014, they raised $ 1.34 billion.
Read on to learn more about Alaska property tax.
Anchorage Property Tax Definition
Unlike other property taxes in our country, the Alaska Anchorage property tax doesn’t go to the federal and state budget, instead, it goes to financing the municipality’s public policies. For example, the money raised is used for the construction of municipal government projects, maintenance of public transport, financing of school districts and local infrastructure.
In Anchorage, this tax is applied directly to the property and does not fall on the individuals, that is, it does not apply to the individuals who own the property but directly to the property. This means that in the event that there is a delinquency in the payment of taxes, the lien will remain attached to the property title and will be the responsibility of the owner. Even if the property is sold or transferred, the liens will remain and the current owner will be held accountable.
The above also applies to bankruptcy declarations, until the entire debt is paid, the property will maintain its lien and the owner must answer for that.
As in all tax cases, in Anchorage there is the possibility of claiming exemptions and amounts to be paid could be reduced, however, the property tax rate for those who do not apply exemptions is 1.32%, which is well above the national average. These rates are calculated as “mills” where every “mill” is equal to $ 1 of tax for every $ 1,000 in assessed value.
Another thing you should know about Alaska property tax in Anchorage is that the amount may increase if you do not pay on time since the interest and additional fees for late payment increase the corresponding standard rate.
Extreme late payment can make you lose your property. The Anchorage Municipality Tax Board can seize properties with high incidences of delinquency and offer them for sale at a public tax foreclosure auction for a price well below its real value. The money from the auction is first used to pay the lien due and if there are still profits left, it can be turned over to the original owner.
Alaska Property Tax Exemptions
Although the Municipality of Anchorage has one of the highest property tax rates in the state, there are several exemptions to reduce the amount of this type of tax. Let us also remember that there is the Permanent Fund Dividend program and through it, Alaska residents receive an annual amount that helps them pay the high living costs that many people can face while inhabiting this state.
The homestead exemption may be claimed by the owner who occupies the home as his or her primary residence. This means that, as the homeowner, if you live there permanently and it is your main home, you can apply for this exemption before the Anchorage Municipality’s Office of the Assessor.
There, you will deliver a copy of the application, they will explain to you the requesting process to get this benefit that in addition to reducing the amount of your tax can also avoid the lien on your house in case of property unpaid taxes.
The fact that it is a family property and that it is the permanent and primary residence can help you claim the exemptions to Alaska property tax, but it is important that you, as the owner, live there.
This exemption can be up to 20% of the appraised value and a maximum of% 50,000 per year. However, it is not the only exemption applicable to this type of tax.
- Veterans can also request an exemption of up to $ 150,000. This also applies to widows or widowers of veteran and disabled veterans.
- The same is true for the elderly. Anchorage residents who are 65 years of age or older can apply for an exemption of up to $ 150,000 from the assessed value, as long as they own the home and live there as their primary residence.
In addition, homeowners who pay the “mill” rate (15 mills) can receive an exemption worth $ 2,250 per year. The Fire Protection Exemption and the Military Service Widow / Widower Exemption are other exemptions that can reduce the amount of the Alaska property tax up to $ 150,000. In the case of Business Property exemptions, the value is $ 20,000 of assessed value.
Regarding your federal taxes, you can deduct 100% of your Anchorage property tax on your Federal Income Tax return as an itemized deduction. The same goes for your Alaska Income Tax return, the local government allows you to deduct some of your Anchorage property taxes when you file your Alaska Tax return.
READ MORE: How to get Alaska retirement benefits
Anchorage Municipality Assessor’s Office
For advice regarding the Alaska Property Tax, the local government has an office available to its citizens in order to attend to all the requirements of taxpayers. It is currently closed to the public but you can still request information about your private appraisal through the mail, phone, or e-mail.
You may contact them by calling 907-343-6770 or by sending an e-mail to wwfipa@muni.org. If you need a meeting with them, you may ask for an appointment.
In addition, you can also contact the State Assessor to help you with the regulations relative to the annual Full Value Determination (FVD), assessment and taxation issues, exemptions issues, and taxation practices and procedures. You may contact this office by calling (907) 269-4565 or sending an e-mail to the Acting State Assessor, Joseph Caissie, joseph.caissie@alaska.gov. They are located at 550 West 7th Avenue, Suite 1650, Anchorage, AK 99501.