New tax classification for owner-occupied housing advanced

Lawmakers gave first-round approval Aug. 16 to a proposed constitutional amendment under which the Legislature could tax owner-occupied housing at a different rate than other classes of property.

Under LR2CA, sponsored by Sen. Tom Brandt of Plymouth, voters could amend the state constitution to allow the Legislature to provide that owner-occupied housing constitutes a separate and distinct class of property for tax purposes and provide for a different method of taxing it than other types of property.

Brandt said the proposed amendment would give lawmakers the option to adjust the valuation of owner-occupied properties the same way it already can for agricultural and horticultural land, which is valued for property tax purposes at 75 percent of its actual value. Doing so would allow the Legislature to better target property tax relief to homeowners, he said.

Brandt offered an amendment, adopted 28-17, under which the proposed amendment would be submitted to voters at a special election to be held in conjunction with the statewide general election in November 2024.

He said the amendment would ensure that the question could go before voters this fall if LR2CA is approved by the Legislature with at least 40 affirmative votes.

Elkhorn Sen. Lou Ann Linehan supported LR2CA, saying many other states differentiate residential and commercial property for tax purposes. By grouping those two classes, she said, Nebraska’s constitution makes any state property tax relief program aimed at homeowners prohibitively expensive.

“If we could move them into a different class,” Linehan said, “we could do a lot for residential homeowners.”

Sen. R. Brad von Gillern of Elkhorn opposed the measure, saying its potential effects are not well understood. Reducing valuations for owner-occupied housing could shift the property tax burden to agricultural and commercial property owners, he said.

“If somebody pays less,” von Gillern said, “somebody is going to pay more.”

After adoption of Brandt’s amendment, senators voted 32-14 to advance LR2CA to select file.