Boise homeowners will see drops in property taxes this year. Here’s why, what to expect

For the first time since the years after the Great Recession, city officials project that Boise homeowners will see decreases in their property taxes.

The proposed budget — which includes a 2% base tax increase, rather than the allowable 3% — would result in an 8.7% reduction in property taxes for the average homeowner, or about $138 in savings, Boise budget director Eric Bilimoria said during a presentation Tuesday.

The same trend is happening across most of Ada County, said Brad Smith, the chief deputy at the Ada County Assessor’s Office. In an email, he said the last time property values went down was in 2012.

That’s a big change from recent years, which have seen huge increases in property values before and during the COVID-19 pandemic. In 2022 alone, property values in Ada County increased by 30%. From 2019 to the peak in 2022, average home values in Ada County rose by more than 80%, Boise Regional Realtors President Debbi Myers told the Idaho Statesman.

Part of the reason for the decrease in taxes is that home values have gone down. Since early last year, home prices in Boise have fallen by 10%, Myers told the Statesman by phone. Across Boise, Meridian, Nampa and Caldwell, homes have seen a 4.2% decrease in value since early last year, according to data from the National Association of Realtors.

“The explanation for that is really pretty simple,” Myers said. “We were undervalued pre-COVID, and then we had a surge during COVID that was not in line with any reality. And now it’s kind of correcting back to where it should be.”

Commercial property to bear more cost

Myers said she expects more “reasonable” growth to return in the coming years.

This year, Bilimoria said he expects taxes on residential properties to drop from an average of $1,594 in 2022 to $1,456.

Home values in the Treasure Valley still remain above the national average.

Bilimoria said homeowners would see “favorable conditions” in the coming tax year because of decreases in home values and increases in values for commercial properties.

In recent years, Ada County has seen a large shift in the tax burden, increasing the portion of property taxes paid by homeowners and decreasing the amount paid by commercial properties. That’s starting to change because of the slowdown in the residential market.

“This is the first time we’ve seen that in several years, whereby residential assessed values are going down and commercial are going up,” Bilimoria said.

Smith said that outside of small “pockets” that have seen increases, residential market activity has slowed in Ada County, whereas commercial activity has not.

Idaho also caps the homeowner’s exemption, which allows residents to write off a portion of their primary residence at tax time. But with the cap tied to a dollar amount — $125,000 for the past few years — the benefit shrinks whenever property values rise.

Boise’s decision to not increase the tax base by 3% — the maximum allowed under state law — will also result in savings of $14.27 for the average homeowner, according to the city’s calculations.

Residents could see further reductions once a set of property tax reforms, made into law with House Bill 292, go into effect. Bilimoria said the savings won’t be calculated until the fall, but that there could be up to 20% in additional savings off tax bills.

“These trends, coupled with House Bill 292’s property tax reduction efforts, mean residential property owners’ share of the property tax burden should decrease significantly for 2023, providing much-needed relief to Ada County homeowners,” a Monday press release from the Assessor’s Office read. “Early estimates indicate that the residential property owners’ share of the property tax burden for Ada County could decrease from 79% to 73%, reversing trends that have favored commercial property owners over the last 10-plus years.”

Most homeowners are scheduled to receive their new assessments later this month or in early June. Property tax bills go out in November and are due in December.