Qualifying primary homes would have zero taxable value

Qualifying residential property would have a taxable value of zero percent of its fair market value. This covers qualifying homes and associated residential land. The home must be designed for no more than three families and used as a primary residence. Associated residential land is included only if the home’s owner also owns the land. This provision is scheduled to take effect January 1, 2027, only if voters adopt the specified constitutional amendment.

The state would collect an additional two percent sales tax and two percent use tax, then transfer that revenue to an account for payments to counties. The added taxes would apply to taxable sales and purchases, subject to the industrial facility exception. County payments would be based on reported property tax reductions. The added taxes would not apply to sales to or purchases by industrial facilities during permitting and construction. Counties would report property tax reductions, and county treasurers would distribute available payments to local governments. If funds are insufficient, county payments would be reduced proportionally. From January 1, 2028, the reported tax reductions would exclude amounts for mills used to repay bonds. Any remaining account money would stay in the account, and the legislature would review it each year and consider direct payments to local governments. The added sales and use taxes are scheduled to begin April 1, 2027. Each year, payments would be based on revenue lost in the preceding year and distributed by February 15.