Property Taxes Could Come Crashing Down Under Democrat Proposal

A Nebraska Democrat is trying to tackle the state's pricey property tax bills with an unorthodox legislation that would throw local counties into the real-estate business and likely limit excessive valuations.

The unconventional proposal was made on Friday by Senator Eliot Bostar of Lincoln, a 36-year-old Democrat who was elected in November 2020. Under the proposed bill, LB1183, a local county's assessed property valuation could be considered the same as an offer to purchase that same property for the amount they valued it at, if the homeowner decides to sell.

Nebraska homeowners would then have 90 days to accept the offer by the local county as long as their house is "substantially the same condition upon acceptance" as it was during the assessment. Newsweek contacted Bostar's office for comment by email on Monday.

Nebraskans carry one of the top 10 heaviest property tax burdens in the U.S. when compared to the mean income in the state, according to website SmartAsset. On average, Nebraska's property tax rate is 1.61 percent, but in some of the state's largest counties, it can go up to 2 percent. Property taxes in Nebraska are calculated based on the market value of the property, which is estimated by local county assessors.

"It is against our laws for your property to be valued in excess of 100 percent of its market value," Bostar said in an interview on Friday, quoted by the Lincoln Journal Star.

"If the valuations are following the guidelines we have within the law, there should never be a problem with having that be potentially executed as a purchase. I think it's a good idea," Bostar added.

Bostar's bill includes exceptions for the valuations of commercial or industrial property assessed at more than $1 million, which would not be considered as offers, and for residential property that has received an allocation of federal low-income housing tax credits.

Under the proposed measure, county assessors would no longer be elected but instead appointed by county boards, which are also elected. Bostar said that this would ensure there is no "independent assessor going rogue and then bankrupting the county."

Bostar added that, if approved, this would grant Nebraska homeowners an immediate reduction in property taxes, though he said that county officials he ran the idea to had an "initial negative reaction" to the proposal.

It could, according to the senator, be a good measure for counties. "If they're doing their job correctly, the majority of the properties that they would have to take [...] would net a gain in revenue, because they would turn around and essentially flip the property."

Bostar's is a radical idea that has the potential to see the valuation of homes plummet.