The Idaho property tax system is a principal source of funding for local governments, school districts and a wide range of other public services delivered at the local level. Property taxes also fund capital projects, infrastructure development and other long-term investments. In 2015, Idaho taxing districts collected a total of more than $1.6 billion in property taxes, roughly 31.8% of all state and local tax collections during the year. School districts were the single largest recipient of property tax revenue, accounting for a 30.1% share. Municipal governments collected a 26.7% share, while county government took 26.4% and road projects accounted for 6.3%. Other notable revenue recipients include fire departments, junior colleges and cemetery districts.

Property Valuation in Idaho

Under the Idaho property tax system, all real property is annually assessed at 100% of its prevailing market value on the first of January. Thus, property valuations may rise or fall in any given year depending on fluctuations in the local market. County assessors must inspect properties once every five years for valuation purposes. Any improvements that add value to the property are to be reflected in tax assessments, including structural additions, remodeling work and exterior paving. To update assessments in other years, assessors rely on sales data and related information concerning similar properties in the area.

Certain items of personal business property are also subject to property tax in Idaho. Personal property includes property not attached to land, such as furniture and machinery. Under legislation passed in 2013, the first $100,000 of personal business property is exempt from taxation. Any personal business property acquired since 2013 at a cost less than $3,000 is separately exempt from taxation and need not be included under the $100,000 exemption. Numerous other special exemptions are available; business owners should contact the local county assessor for a full accounting.

Property Tax Relief in Idaho

While property is assessed at full market value in Idaho, there are several programs in place to lower property tax bills for homeowners in the state. A standard exemption is available on all owner-occupied primary residences equal to 50% of the market value of the residence including one acre of land. The exemption is capped at a value of $94,745 for 2016. When this exemption is used, the prevailing property tax rate is only applied to the nonexempt value of the home, known as the taxable value. Other special exemptions are available to certain groups that meet income requirements, including people age 65 and older, former prisoners of war (POWs), minors without parents, blind homeowners, and widows and widowers.

Property Tax Rates in Idaho

Property tax rates are determined annually according to the budget needs of each individual taxing district. Taxing district officials are required to produce a budget and hold public budget hearings each year. The portion of any given budget funded by property taxes may not increase by more than 3% per year unless the taxing district has expanded in size. However, voters may choose to approve a budget override or a special levy to provide more operational funding or pay for capital projects.

Once a budget amount is approved, it is divided by the taxable value of property in the taxing district. This calculation produces a tax rate, which falls on every property owner in the district. Properties are typically located within multiple taxing districts. Each year in November, the county treasurer delivers every property owner a tax bill that includes an accounting of each taxing district and its tax rate.

Average Property Tax in Idaho

In 2015, the average urban property tax rate in Idaho was 1.55% of the taxable value of property. The average rural property tax rate was 1.03%. The difference arises from the fact that, in most cases, rural homes are located within fewer taxing districts than urban homes. At the county level, urban rates ranged from 0.71% in Custer County up to 2.35% in Power County. Rural rates ranged from 0.44% in Custer County up to 1.45% in Latah County.

How Do Idaho Property Taxes Compare?

Comparing property tax systems across state lines is rarely an easy thing to do. While Idaho property tax is relatively straightforward, many states operate complex multifaceted systems created through decades of incremental tweaks and voter-approved changes. In fact, Idaho stands out for the relative simplicity of its market-based property valuation method and its blanket homeowner exemption. Homeowners in the state also enjoy a very low effective property tax rate compared to most other states, especially those in the Midwest and Northeast.

The Tax Foundation, a nonprofit organization, recently produced a study focused on the average effective tax rate for owner-occupied housing in each of the 50 states and Washington D.C. While average rates do not show the whole picture — think of the urban-rural property tax divide in Idaho — they do provide a quick way of comparing property tax systems as they relate to typical homeowners. According to the study, Idaho has an average tax rate of 0.75% on the full market value of owner-occupied residential property. While its neighbors, Wyoming and Utah, come in at 0.61 and 0.68%, respectively, Idaho undercuts its remaining neighbors by a decent margin. Montana and Nevada both have an average rate at 0.86%, while Oregon and Washington both come in at 1.09%. On a national scale, Idaho has the 13th-lowest-average among all states.

Illinois Property Tax Guide

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