Property Tax Circuit Breakers and Tax Freezes

This article provides information concerning property tax circuit breakers and property tax freezes, mechanisms employed by states to offset some of the property tax burden on certain taxpayers.

It describes the existing Kansas property tax circuit breakers and examines the prevalence of circuit breakers and tax freezes throughout the country.

Finally, it notes recent Kansas legislative considerations regarding these types of programs.

Property Tax Circuit Breakers and Tax Freezes

A property tax circuit breaker is a type of property tax relief where the allowance and amount of benefits is dependent on the income or other eligibility criteria and the amount of property taxes paid. The terminology is analogous to a device that breaks an electrical circuit during an overload. Accordingly, circuit breaker property tax relief is designed to accrue to taxpayers once the person’s property taxes have become high relative to his or her income.

A property tax freeze program “freezes” a taxpayer’s property tax burden to a fixed year and generally prohibits tax increases beyond the amount of tax paid in that year. The fixed year is typically the year in which the taxpayer reached an age or income threshold, and the prohibition of an increase may be accomplished in the form of a refund of a portion of the property taxes paid. A similar type of program can be described as an assessment freeze, where the tax may change, but the taxable valuation of the property is tied to a fixed year.

Existing Kansas Circuit Breakers

Kansas currently has two property tax circuit breaker benefits, housed within a single program. Taxpayers are only permitted to claim one of the two benefits. Kansas does not have a tax or assessment freeze program.

Kansas became the sixth state to enact a circuit-breaker program with the creation of the Homestead Property Tax Refund Act in 1970. As the program exists today, taxpayers who own homes valued at less than $350,000 may be eligible for the program. Additionally, the household of the taxpayer must have a person who is age 55 or older, a dependent under the age of 18, or an individual who is blind or otherwise disabled. Finally, the household income is required to be equal to or less than $36,300. The benefit amount is based on a sliding scale of household income and property taxes paid, with a minimum benefit of $30 and a maximum benefit of $700.

Alternatively, Kansas taxpayers aged 65 or older with household income equal to or less than $20,300 may be eligible for the Selective Assistance for Effective Senior Relief (SAFESR) program, which provides a refund of 75 percent of the prior year’s actual property taxes paid.

Other States’ Circuit Breakers and Tax Freezes

Currently, 30 states and the District of Columbia offer a circuit breaker program, and 16 states offer either a tax or assessment freeze program, or both. Eight states offer both a circuit breaker and a tax or assessment freeze program (shown in orange on the map above).

Recent Kansas Legislative Considerations

The 2019, 2020, and 2021 Kansas Legislatures have each considered legislation containing provisions entitled the Golden Years Homestead Property Tax Freeze Act. However, this legislation has not been enacted into law. These pieces of legislation would have created a property tax freeze program in Kansas. The different versions of the legislation included various differing provisions for the fixed tax year, the income and other eligibility criteria, and benefit maximums. Some versions also would have eliminated the SAFESR program and replaced it with the Golden Years tax freeze program.