LINCOLN — Nebraska property owners will save a little less on property taxes this year as the state’s Property Tax Credit Fund has to stretch a little more.
State revenue officials announced Friday that the fund will provide credits worth $86.50 per $100,000 of valuation for homes and businesses. That means that the owner of a $150,000 house will get $129.75 subtracted from his or her tax bill.
Credits for agricultural land will be $103.81 per $100,000 of valuation, meaning that a farmer owning property valued at or $1,500,000 would get $1,557.15 subtracted.
Property tax credits last year were $87.95 for residential and business property and $105.56 for farmland. The credits shrink as property valuations increase statewide. Valuations grew by 2.04 percent from last year to this year, according to state revenue officials.
The property tax credit program began in 2007, with a budget of $105 million. State policymakers increased the fund repeatedly, until it reached $224 million in 2016.
Policymakers also earmarked $20 million of the total for ag land property tax credits. That was a partial answer to concerns about the steep rise in ag land valuations over the past decade.
Money for property tax credits comes from state sales and income tax payments. The credits appear as a line on the annual property tax statement.
The property tax credit does not alter property tax levies, which are set by school boards and other local governments. Rather, the credit reduces the amount of tax that homeowners and other property holders have to pay.
Individual property tax bills are determined by the spending of local schools and other government subdivisions, the valuation of the person’s property and the valuation of all other properties in each subdivision.