Tax deferral passes House
Legislation aimed at encouraging affordable housing has passed the Alaska House.
Juneau Rep. Cathy Muñoz sponsored HB 264 at the request of local contractors and the Alaska State Home Building Association who say current tax laws hinder development.
The bill would allow municipalities to defer property tax increases on subdivided lots until they are sold or have commercial value. Munoz says taxes can be five to 10 times higher as soon as the land is subdivided.
“In communities like Juneau that experience a limited land base and high housing costs, that extra carrying cost is a huge deterrent to new subdivision and housing development,” Munoz says. “So this is meant to defer the increasing tax burden, but ultimately the cities benefit because they get that tax burden back, plus extra tax due to new housing in their communities.”
The legislation also allows local governments to negotiate payment terms when the deferred taxes are due.
HB 264 is on its way to the Senate.