Amendment 79 Homestead Tax Credit Information
Amendment 79, to the Arkansas Constitution, was proposed by the 82nd General Assembly and adopted by the voters in the November 2000 general election. It took effect January 1, 2001.
This amendment set forth the following benefits for the taxpayers in the state of Arkansas:
- 10% limit increase to assessed value of any commercial or non homesteaded parcels (this limit on assessed value increase does not apply to newly discovered real property; new construction; or substantial imrovements to real property)
- 5% limit increase to assessed value of any homesteaded parcels (this limit on assessed value increase does not apply to newly discovered real property; new constrution; or substantial improvements to real property)
- A freeze on the taxable assessed value of homesteaded property for any individual that is 65 years or older or 100% disabled.
- Up to $375 tax credit off the tax bill of the homesteaded parcel
FAQ Regarding Amendment 79 Homestead Credit
1) Is the homestead tax credit personal to an individual? No. It attaches to the property and relates back to January 1 and remains attached for the entire year regardless of any changes in use of the property; regardless of whose hands the property passes into; and regardless of who gets the tax bill or pays the taxes. (ACA 26-26-1118)
2) Can a person claim more than one homestead tax credit in any one year? No. If the taxpayer has a credit on a homestead and buys another property and utilizes it as their homestead, they are precluded from claiming a second homestead. However, if the second property already has a credit on it when they purchase it, the credit remains and they are not guilty of claiming two credits in one year. (ACA 26-26-1119)
3) Is a person still eligible for the homestead tax credit benefits is they deed their property but retain a life estate? Yes. The important factors are that this property remains your principal place of residence and that you are still owner by way of the life estate retained. (ACA 26-26-1118 and ACA 26-26-1122)
4) Is an individual still eligible for the homestead tax credit benefits if they reside in a nursing home? Yes. A person can be temporarily away from their home but still intend for it to remain their principal place of residence or if the property were maintained in such a way that they could/would return when the temporary absence was concluded. (ACA 26-26-1122)
5) Can my taxable assessed value ever increase or change once it has been frozen as a result of Amendment 79? Yes. Once your taxable assessed value has been frozen, it can only be increased because of one of the followiing reasons:
New Construction- changes to real property that have occurred to existent property on the tax roll, to also include change in use of the property. (ACA 26-26-1122) (Assessment Coordination Department Rule 4.08.2)
Newly Discovered Property- real property that has never been on the assessment roll or tha may have had a change in use. (ACA 26-26-1122) (Assessment Coordination Department Rule 4.08.2)
Substantial Improvement- renovation, reconstruction or refurbishment occurring that will add 25% or more to the contributory value of an improvement to the property.
**It is also important to note that while the assessed value wouldn't be changed, an increase to the millage rate will cause your tax bill to increase. The tax bill is never frozen and can be affected by a change to the multiplying factor (millage rate) in calculating your tax bill.**