When Kansas enacted the Homestead Property Tax Refund Act in 1970, it became the sixth state to enact a “circuit-breaker” style of property tax relief.
A “circuit-breaker” is a form of property tax relief in which the benefit is dependent on income or other criteria and the amount of property taxes paid. This moniker developed as an analogy to the device that breaks an electrical circuit during an overload, just as the property tax relief benefit begins to accrue once a person’s property taxes have become overloaded relative to his or her income.
Thirty states, including Kansas, currently have some form of circuit-breaker program.
- Household income of $35,700 or less; and
- Someone in the household is:
- Age 55 or above;
- A dependent under age 18;
- Blind; or
- Otherwise permanently disabled.
Renters were eligible (15 percent of rent was considered equivalent to property tax paid) until tax year 2013.
The current Kansas Homestead Refund Program is an entitlement for eligible taxpayers based upon their household income and their property tax liability that provides a refund of a percentage of the property taxes actually and timely paid on real or personal property used as their personal residence. The maximum available refund is $700, and the minimum refund is $30.
A 2006 change to the Homestead Refund Program expanded it by approximately $4.5 million. The 2007 Legislature passed an even more significant expansion of the program, which increased the size of the program by an additional $9.9 million.
Among the key features of the 2007 expansion law are:
- The maximum refund available under the program was increased from $600 to $700;
- 50.0 percent of Social Security benefits were excluded from the definition of income for purposes of qualifying for the program; and
- A residential valuation ceiling was added, prohibiting any homeowner with a residence valued at $350,000 or more from participating in the program.
Program Claims and Refunds
|Eligible Claims Filed||Amount||Average Refund|
|FY 2013||115,719||$37.586 million||$325|
|FY 2014||86,082||$29.415 million||$342|
|FY 2015||70,343||$23.032 million||$327|
|FY 2016||76,202||$25.968 million||$341|
|FY 2017||79,737||$24.649 million||$309|
|FY 2018||83,155||$24.948 million||$324|
|FY 2019||73,302||$23.994 million||$327|
|FY 2020||63,526||$20.853 million||$328|
The impact of the 2006 and 2007 program expansion legislation is demonstrated on the following hypothetical taxpayers:
|Pre-2006 Law||2006 Law||2007 Law|
|Elderly couple with $1,000 in property tax liability and $23,000 in household income, $11,000 of which comes from Social Security benefits||$72||$150||$385|
|Single mother with two young children, $750 in property tax liability, and $16,000 in household income||$240||$360||$420|
|Disabled renter paying $450 per month in rent, with $9,000 of household income from sources other than disability income (no longer eligible, as of tax year 2014)||$480||$528||$616|
Edward Penner, Senior Economist
Dylan Dear, Managing Fiscal Analyst