Ending a two-year property-tax exemption on new homes isn't as simple as letting the exemption expire at the end of the year, Minot council members discovered Tuesday.
For new construction, Minot allows the first $75,000 of home value to be exempted from property taxes for two years. Meeting Tuesday, the Minot City Council's Finance and Improvements Committee sought to determine how to bring that program to an end with the least confusion for the public.
State law provides that a homeowner is eligible for the tax break in the tax year following the year in which construction is completed and occupancy occurs. By ending the exemption after Dec. 31, homeowners who moved in this year would not get the tax break, which would be scheduled to start in 2013.
Assessor Kevin Ternes said the city sends out exemption application forms when it learns of a potentially eligible property. Some homeowners who have received those forms would have the offer retracted. He suggested the committee consider allowing the exemption if construction has started this year. City manager David Waind concurred that people who began construction with the assumption of eligibility should have that eligibility.
The committee voted to recommend the council let the tax break expire when it sunsets at the end of this year and directed Ternes to work with the city attorney on wording to ensure eligibility for those who start construction this year.
Council member Lisa Olson cast the only dissenting vote.
"We still have flood victims who could be looking at construction. I know there's lot of public support for ending this, but I think we are rushing it," she said. "It should be extended out two more years in order to give everyone who still needs time to find a home time to do that."