Goodbye Dickinson homebuyer tax incentive? Abatement may go on strong housing market

Talk about it

A tax abatement that buyers of newly constructed homes in Dickinson have been able to take advantage of could end if city officials have their way.

Because the housing market is booming, there is no longer a need to offer the incentive, Dickinson Mayor Dennis Johnson said. The city and other tax collecting entities are also missing out on potential revenue for the two years the owners aren’t paying taxes.

The city’s share of the estimated $850,000 in taxes that could have been collected, including 589 single-family structures with permit values of $128 million is roughly $200,000 to $225,000, Dickinson City Assessor Joe Hirschfeld said. Other tax collecting agencies include the schools, the county and the park board.

“When three or four years ago we had 30 to 34 homes and the intent of the exemption is to spur growth, that wasn’t a whole lot of taxes,” he said.

“But with the number of permits that we had this year” the taxable amount is significant.

The abatement allowed for the exemption from taxation of up to $100,000 of the full value of all new single-family, condominium and townhouse residences — exclusive of the land value — for the first two taxable years, according to the proposed resolution.

The city has offered the abatement off and on over the years, the most recent was picked up shortly after Johnson joined the commission in 2000.

The abatement can make a difference when young couples are choosing between new construction and an older home, said Susie Lefor, a Realtor with The Real Estate Co. in Dickinson.

“I believe that a buyer looking at new construction takes it into account,” she said. “Because when you’re buying a new construction there are a lot of other expenses involved in new construction. … With the money that they save, I think it goes back into the community anyway.”

If the commission does do away with the abatement, Lefor said she it can be brought back as needed.

“At some time in the future we’ll reach that point where housing construction will slow down significantly,” Johnson said. “At that time, whoever’s on the commission, they might want to look at reinstituting the tax abatement.”

At its last regular meeting on Jan. 22, the City Commission held a public hearing on the matter, but no one spoke out for or against the matter.

A decision is likely at the commission’s meeting Monday.

The Badlands Board of Realtors plans to have a presence at that meeting, Lefor said, including herself.

The meeting is 4:30 p.m. Monday at City Hall. Agendas are posted on the city’s website by the afternoon of the Friday before the meeting.

Tags: news, housing, dickinson, tax, exemption