Erik Burgess, Published September 18 2012
Moorhead finalizes tax rebates for housing constructionMOORHEAD – Those looking to build new houses or improve their existing abodes could soon be doing so on the cheap.
Following City Council action this week, Moorhead, Clay County and the Moorhead Area Public School District here have all passed tax abatement resolutions for new residential construction and for improvements made to existing residential properties.
The program will give two-year general tax rebates to those who build new or add on to their existing property, provided the additions meet specific qualifications.
“I think we need to give real housing development a shot in the arm,” Councilman Mark Altenburg said Monday night. The council voted 7-1 to approve the resolution, with Luther Stueland voting against.
At the city and school district level, it applies retroactively to property constructed since Jan. 1. At the county level, it applies beginning Sept. 1.
The move is an attempt to extend flood-era tax abatements that were funded by the state and used to encourage growth, city officials said.
“This is one more advantage to take into consideration as folks are looking to build new, picking a location to build new or thinking about home improvements,” said Scott Hutchins, director of community services.
Those eligible will still pay their general taxes, but those taxes paid to the city, schools and county will be returned in a rebate check at the end of the year.
Fargo, too, offers tax exemptions on new construction, but only exempts the first $150,000. Moorhead’s abatement program does not have a value limit.
“Ours is actually a more generous program than Fargo,” Altenburg said.
Whereas previous Moorhead tax abatement programs were funded by the state, this is funded locally. Eligible properties will be tax-assessed by each of the levying jurisdictions the year after their construction.
Those jurisdictions will then increase their total general levy accordingly the year following the assessment to provide funds for the rebates, said Lori Johnson, county auditor.
With the new construction, the base of taxable property will increase proportionally with the general levy, so taxes shouldn’t go up because of the rebates, she said.
“We’re adding a levy, but we spread it among a higher base,” Johnson said. “If everything’s equal, it really doesn’t increase taxes.”
“This benefits the entire city, not just those folks moving into the new homes,” Altenburg said.
Councilwoman Nancy Otto said new homes also bring in new students and new patrons, requiring other new facilities to be built across the community.
Regarding home improvements, the tax-assessed value of the improvements, not the cost, must be $25,000 or greater and those of apartment complexes must be $50,000 or greater to be eligible for a rebate.
Hutchins said Dilworth and Hawley have also considered programs like this.
The city said additional information will be available at www.makemoorhead
Readers can reach Forum reporter Erik Burgess at (701) 241-5518
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