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Comprehensive Local Tax Exemption Legislation to Benefit Farmers and Homebuyers Signed into Law
Nikiski, AK – Yesterday, Governor Mike Dunleavy signed Senate Bill 179 into law. Sponsored by Senator Jesse Bjorkman, R-Nikiski, this legislation is a result of extensive discussions with realtors, farmers, and municipal representatives. Senate Bill 179 prohibits local governments from adding transfer taxes to the sale of houses and other real property, improves the program that provides property tax breaks to farmers, allows municipalities to defer taxes on property used for economic development, and improves the required assessor qualifications and property tax appeals process.
As introduced, SB 179 prohibits municipalities and the state from imposing transfer taxes, fees, or other assessments on the sale, grant, assignment, or transfer of real property. By eliminating these additional costs, the bill seeks to make homeownership more affordable for all Alaskans, particularly benefiting young families, first-time homebuyers, and seniors on fixed incomes. Representative Julie Coulombe, R-Anchorage, introduced companion legislation, HB 134, in the House.
"This is a significant win for Alaska. By eliminating transfer taxes and fees on real estate transactions, we're reducing financial burdens and making homeownership more accessible for everyone, especially those just starting out and our seniors,” said Sen. Bjorkman. “This is about keeping the dream of homeownership alive and attainable."
Senate Bill 179 underwent significant amendments during the final days of the legislative session. Three provisions that had previously passed the Senate were added to the bill in the House, further enhancing its scope and impact.
Senate Bill 161, also sponsored by Senator Bjorkman, aims to bolster Alaska's food security by amending state laws to support local farmers. The policy expands the mandatory farmland property tax break to include farm-related structures and updates the qualification criteria to a $2,500 annual sales requirement, coupled with filing an IRS Schedule F. This amendment includes recommendations from the Alaska Food Strategy Task Force 2023 Report.
"SB 161 addresses Alaska's heavy reliance on imported food by strengthening our local farming community. The updated tax breaks and support for diverse agricultural opportunities ensure that we can grow more of our own food,” said Sen Bjorkman. "By updating our farmland property tax laws, we not only support existing farmers but also encourage new ones. This legislation is a direct response to our state's need for greater food security and local food production, making Alaska more self-sufficient and resilient."
Senate Bill 179 also integrated a portion of Senate Bill 77, by Senator Forrest Dunbar, D-Anchorage. Senate Bill 77 allows municipalities to fully exempt property taxes for economic development purposes. Currently, municipalities may only exempt the portion of property taxes above the district’s required local contribution. It also removes this limit for economic development properties. This exemption will not impact local contribution to education funding to ensure school districts are held harmless.
"These economic development provisions provide municipalities with the tools they need to spur growth and tackle housing crises,” said Sen. Dunbar. “By removing limits on tax exemptions, we're enabling more robust development initiatives that will benefit our communities and local economies."
Lastly, Senate Bill 179 included Senate Bill 242, sponsored by Senator Jesse Kiehl, D-Juneau, along with the House companion HB 347 by Representative Julie Coulombe, R-Anchorage, ensures a fair process in property tax assessments for Alaskans. It requires local governments to use a qualified assessor and published standards to figure out what property is worth. It improves the appeal process by forbidding the government from raising an assessment in the middle of an appeal and requires a written explanation if the final decision deviates from a fee appraisal. The bill also changes the default for hearing appeals from elected assemblies to an appointed board of equalization.
“Fair values are the cornerstone of any property tax. Senate Bill 242 makes sure property assessments get done transparently and professionally,” said Sen. Kiehl. “Improving the appeal process should also give Alaskans confidence they’ll get a fair hearing if they disagree with city hall."
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