There's no reason for you not to purchase a home in Idaho.
With that being said, as exciting as your investment can be and as lucrative as it may seem for your portfolio, there are some basic legal requirements that you need to understand. One of these is the realm of property tax in Idaho.
This will include elements such as when your property tax payments are due, what the taxable value of your home is, how to pay your property tax bills, and how Idaho property tax rates are even calculated.
It can seem like a lot to take in, but it's the kind of information you don't want to be ignorant about considering the potential penalties you may face, especially as a landlord, property manager, or real estate investor.
To maximize your profits and make the most out of your investment, you need to have a thorough understanding of how property taxes work in your state. In this case, that state is Idaho.
You have nothing to worry about where information is concerned though, since we're going to take the time to give you a high-level overview of everything you could possibly want to know.
Let's dive into the key things landlords and property managers should know about Idaho property taxes to stay compliant and keep your real estate business lucrative.
Are you a landlord or property manager looking for software to improve your property management accounting and more? Schedule a free demo and see how DoorLoop can help you.
How Many Times Do You Pay Property Tax a Year in Idaho?
While some states will have you paying taxes in two installments by default, Idaho is not one of them.
Instead, you'll be getting a single bill for your property taxes each November, with your payments becoming due by December 20 of the same year.
Note that while the property tax bill is sent as one, you can still choose to pay your Idaho property taxes in two halves if you so desire.
When going this route, you will pay the first half by the standard December 20 date, with the balance being due by June 20 of the following year.
Consequences of Late Payments
Once you own real property, the government requires that you pay property taxes. This is necessary as the income from same is used for libraries, roads, parks, public services, and more. If a homeowner does not pay the said taxes, then a lien will be placed on the property.
In Idaho, the county will be the one to get the title to your home via an established tax deed process, after which it will be sold to a new owner. Thankfully, there is a bit of breathing room here as you will be allowed some time to sort out whatever delinquent amounts there are to prevent this tax sale from happening.
The county doesn't make this move unless the property taxes in question become three years delinquent. First, there will be a notice of the delinquency, and you will receive the opportunity to pay and stop the process. This is what is known as "redeeming" the property.
If the process should carry on, you will receive a certified mail notice with a return receipt requested before the county gets the tax deed. This will be no 2-5 months before the tax deed date.
Should the notice be undelivered, the tax collector is required to put a notice in the newspaper once weekly for four weeks. the last posting must be 14 days - 2 months before the deed is issued.
Note that you have the right to dispute the delinquency if you so desire. If you prevail or don't get caught up at the hearing, the county will bring the title to your property.
After the tax deed is issued, a public auction will be held before 14 months have passed since. There, the home will be sold to whoever is the highest bidder. With that being said, some threshold requirements must be met for this sale to happen. This includes costs, interest, and overdue taxes. Be that as it may, the county commissioners reserve the right to accept a lesser bid.
There is the possibility that the home isn't sold at the auction. In that case, a private sale or a later auction can be used.
How to Pay a Property Tax Bill in Idaho
Thankfully, Idaho has multiple ways to pay taxes, including property taxes, making compliance pretty easy.
You are free to visit the offices of the Idaho State Tax Commission to make your payments or send them in via mail or ACH credit.
Additionally, you can also choose to pay electronically.
How Much Is Property Tax in Idaho?
The median property tax that Idaho homeowners pay is about $1,817 annually. This is lower than other states based on national median property taxes.
But how do you calculate your property tax in Idaho?
In Idaho, property tax will take the full market value of the property into consideration. The property value figure will depend on the assessor in the county where your home is located.
The assessor tends to consider sales prices from recent sales that are comparable to your home in attributes such as condition, location, and size in order to determine the property value and, ultimately, the property tax amount.
With the assessed value being determined, whatever exemptions you have will then be applied. Local governments in the state will levy taxes at various levels, meaning you will see variances between school districts, cities, counties, and more. As a rule of thumb, cities will see greater tax rates than rural areas.
Note, however, that the rates do not apply to taxable value, instead being calculated against market value. Your effective tax rate will consider the median annual property tax rate. This will be used as a percentage of the median home value.
Role of the County Assessor
The assessor's role comes into play annually as this party is responsible for determining what owners are meant to pay as of January 1 in a given year. Note that you can check with the assessor to find out what kinds of exemptions apply to you.
Additionally, if you have any kinds of concerns about the valuation, this is where you would direct them. Finally, if you wish to declare personal property for your business, the assessor can provide you with the appropriate form to do so.
Taxing Districts' Role
Every property will be located in more than one tax district. Note that these are federal units such as county, school, city, sewer, etc.
These districts will develop budgets annually, which are meant to cover their local services. With the budget being approved, the property tax portion will be divided among the total taxable value of every property that falls within it.
This will be the tax rate in that tax district's area. Every applicable district will do the same, and this is what will ultimately yield the total property taxes for the area.
Appealing Your Assessed Value
You may disagree with the value assessment and thus property tax for your property, which is perfectly normal.
If so, these are the steps you want to take:
- Reach out to the county assessor's office and request to speak with the relevant appraiser.
- Reach out to the county clerk, after which you will file an appeal before June's fourth Monday. The Board of Equalization (BOE) meets and discusses appeals.
- If you're not satisfied with the conclusion that the board has come to, you may speak to your county clerk to find out how to can appeal to the district court or the state board of tax appeals.
Increasing or Decreasing Property Tax Rates
Note that Idaho law does not impose any limit on increases or decreases in property value from one year to the next.
There are different reasons yours may change, such as alterations to the market value of every property in your neighborhood, or a discovery by your assessor of more accurate data.
Property Tax Rates
Similarly, no legal limit is imposed on how much the tax bill for a given property can either increase or decrease. Be that as it may, taxing districts are not allowed to raise the property tax section of their budget by greater than 3% unless voters approve the said increase or new annexations or construction is applied.
How Can I Lower My Property Taxes in Idaho?
Property taxes can be a difficult burden, which will leave people wondering what they can do to lower them. Your first option is to appeal your property tax amount using the process that was described above. Here are a couple more ways you can go about it.
Look into Disaster Relief
If your home was damaged or destroyed by a disaster, especially where a state of emergency was applied, you may be eligible for property tax relief.
Investigate Other Exemptions and Tax Relief Programs
You can also have one of these exemptions applied, provided you meet the requirements.
Idaho Property Tax Reduction (Circuit Breaker) Program
This will reduce taxes applicants pay on a home up to an acre of land. Requirements include liabilities, being a former prisoner of war, being 65 or older, etc.
Idaho Property Tax Deferral
This allows for postponement of taxes on primary residences up to an acre of land but payment must be made to the state at a later date.
100% Service-Connected Disabled Veterans Property Tax Relief Program
For qualified persons, property taxes will be reduced up to an acre of land. This requires being recognized as a 100% service-connected veteran.
Property taxes are not easy to navigate.
Use the information provided above to ensure you understand calculation, exemptions, and pay on time.
And if you have any questions about your Idaho property taxes, remember to consult with a professional.
If you're looking for more tips on property management accounting, check out our whitepaper on the best tips for simplifying this complex process.