La. Admin. Code tit. 61 § V-101

Current through Register Vol. 50, No. 9, September 20, 2024

Section V-101 - Constitutional Principles for Property Taxation

A. Assessments. Property subject to ad valorem (property) taxation shall be listed on the assessment rolls at its assessed valuation, which, except as provided in §101. C and §101 F, shall be a percentage of its fair market value. The percentage of fair market value shall be uniform throughout the state upon the same class of property.

B. Classification

1. The classification of property subject to ad valorem taxation and the percentage of fair market value applicable to each classification for the purpose of determining assessed valuation are as follows.

Classifications		Percentages
a.	Land	10%
b.	Improvements for Residential Purposes	10%
c.	Electric Cooperative Properties, excluding Land	15%
d.	Public Service Properties, excluding Land	25%
e.	Other Property (including Personal Property)	15%

2. The legislature may enact laws defining electric cooperative properties and public service properties. (See R.S. 47:1851).

C. Use Value. Bona fide agricultural, horticultural, marsh and timber lands, as defined by general law, shall be assessed for tax purposes at 10 percent of use value rather than fair market value. The legislature may provide by law similarly for buildings of historic architectural importance.

D. Valuation. Each assessor shall determine the fair market value of all property subject to taxation within his respective parish or district, except public service properties, which shall be valued at fair market value by the Tax Commission or its successor. Each assessor shall determine the use value of property which is to be so assessed under the provisions of §101. C Fair market value and use value of property shall be determined in accordance with criteria which shall be established by law and which shall apply uniformly throughout the state.

E. Review

1. The correctness of assessments by the assessor shall be subject to review first by the parish governing authority, then by the Tax Commission or its successor, and finally by the courts, all in accordance with procedures established by law.

F. Homestead Exemptions

1. General Provisions

a. The Louisiana Constitution permits no other property tax exemptions except those provided in the constitution.

b. The constitution exempts to the extent of $7,500 of assessed value, except in those parishes whereby voters approved that the next $7,500 of the assessed valuation on property receiving the homestead exemption which is owned and occupied by a veteran with a service connected disability rating of 100 percent by the United States Department of Veterans Affairs shall be exmpt from ad valorem taxation (see Louisiana Constitutional Article 7, §21(K)(1)(2)(3) regarding the additional exemption):

i. the bona fide homestead, consisting of a tract of land or two or more tracts of land, even if the land is classified and assessed at use value, with a residence on one tract and a field, with or without timber on it, pasture, or garden on the other tract or tracts, not exceeding 160 acres, buildings and appurtenances, whether rural or urban, owned and occupied by any person or persons owning the property in indivision;

ii. the same homestead exemption shall also fully apply to the primary residence including a mobile home which serves as a bona fide home and which is owned and occupied by any person or persons owning the property in indivision, regardless of whether the homeowner owns the land upon which the home or mobile home is sited; however, this homestead exemption shall not apply to the land upon which such primary residence is sited if the homeowner does not own the land;

iii. the homestead exemption shall extend and apply fully to the surviving spouse or a former spouse when the homestead is occupied by the surviving spouse or a former spouse and title to it is in the name of:

(a). the surviving spouse as owner of any interest or either or both of the former spouses;

(b). the surviving spouse as usufructuary; or

(c). a testamentary trust established for the benefit of the surviving spouse and the descendants of the deceased spouse or surviving spouse, but not to more than one homestead owned by either the husband or wife, or both;

iv. the homestead exemption shall extend to property owned by a trust when the principal beneficiary or beneficiaries of the trust are the settlor or settlors of the trust and were the immediate prior owners of the homestead, and the homestead is occupied as such by a principal beneficiary. The provisions of this Subparagraph shall apply only to property which qualified for the homestead exemption immediately prior to transfer, conveyance, donation in trust, or which would have qualified for the homestead exemption if such property were not owned in trust;

v. the homestead exemption shall extend to property where the usufruct of the property has been granted to no more than two usufructaries who were the immediate prior owners of the homestead and the homestead is occupied as such by a usufructary. The provisions of this Subparagraph shall apply only to property which qualified for the homestead exemption immediately prior to the granting of such usufruct, or which would have qualified for the homestead exemption if such usufruct had not been granted.

c. The homestead exemption shall extend only to a natural person or persons and to a trust created by a natural person or persons, in which the beneficiaries of the trust are a natural person or persons provided that the provisions of this Paragraph are otherwise satisfied.

d. Except as otherwise provided for in this Paragraph, the homestead exemption shall apply to property owned in indivision, but shall be limited to the pro rata ownership interest of that person or persons occupying the homestead. For example, a person owning a 50 percent interest in property would be entitled to a homestead exemption of $3,750 of the property's assessed value provided such person occupies the home.

e. No homestead exemption shall be granted on bond for deed property. However, any homestead exemption granted prior to June 20, 2003 on any property occupied upon the effective date of this Paragraph* by a buyer under a bond for deed contract shall remain valid as long as the circumstances giving rise to the exemption at the time the exemption was granted remains applicable. See Constitutional Article 7, §20 (A)(7)

f. In no event shall more than one homestead exemption extend or apply to any person in this state.

g. This exemption shall not extend to municipal taxes. However, the exemptions shall apply:

i. in Orleans Parish, to state, general city, school, levee, and levee district taxes; and

ii. to any municipal taxes levied for school purposes.

h. Homestead exemptions are allowable in any year in which the owner occupied the home prior to December 31 of that year.

i. Property owned by a partnership or corporation is not entitled to homestead exemption (Corporation: A.G.'s Opinion May 7, 1969, A.G.'s Opinion 1940-42, p. 4119; Partnership: A.G.'s Opinion 1936-38, p. 1044).

j. Purchase arrangement which does not transfer title does not give occupant entitlement to homestead exemption (Lease/purchase: A.G.'s Opinion 1940-42, p. 4110, and p. 4115; A.G.'s Opinion 1942-44, p. 1679; Bond for Deed: A.G.'s Opinion No. 87-345, May 12, 1987).

k. Any homestead receiving the homestead exemption that is damaged or destroyed during a disaster or emergency declared by the governor whose owner is unable to occupy the homestead on or before December 31 of a calendar year due to such damage or destruction shall be entitled to claim and keep the exemption by filing an annual affidavit of intent to return and reoccupy the homestead within five years from December 31 of the year following the disaster with the assessor within the parish or district where such homestead is situated prior to December 31 of the year in which the exemption is claimed. In no event shall more than one homestead exemption extend or apply to any person in this state.

2. The purpose of this Section is to partially implement the provisions of Article VII, Section 20(B) of the Constitution of Louisiana relative to the providing of tax relief to residential lessees in order to provide equitable tax relief similar to that granted to homeowners through homestead exemptions.

a. A residential lessee is defined as a person who owns and occupies a residence, including mobile homes, but does not own the land upon which the residence is situated.

b. A residential lessee shall be entitled to a credit against any ad valorem tax imposed relative to the residence property, in an amount equal to the amount of tax applicable on property with an assessed valuation of $7,500 or the actual amount of tax, whichever is less, provided the residential lessee is not otherwise entitled to the homestead exemption (R.S. 47:1710).

3. Residence

a. Only one homestead exemption can be claimed. (A.G.'s Opinion 1942-44, p. 1660, A.G.'s Opinion 1942-44, p. 1678, A.G.'s Opinion 1940-42, p. 4117).

b. If other requirements are met, a person may be entitled to the exemption, even if the taxpayer is a citizen of another state or country (A.G.'s Opinion 1948-50, p. 729).

c. Taxpayer does not lose the exemption by temporary absence (A.G.'s Opinion 1948-50, p. 729).

d. State employee living in another parish does not lose his entitlement if he returns to occupy the property regularly (A.G.'s Opinion 1936-38, p. 1055), and does not rent the property to another (A.G.'s Opinion 1936-38, p. 1054).

e. Army officer required to live away from home who allows relatives to occupy the property rent free does not lose his homestead exemption (A.G.'s Opinion 1940-42, p. 4088).

f. Taxpayer who establishes a second residency for political purposes does not lose the homestead exemption on his first residence (A.G.'s Opinion 86-364, Oct. 17, 1986).

g. If part of a property is used as income producing property, the part occupied by the owner as a residence is exempt, the income producing part is not (portion of home used as a place of business is not exempt, A.G.'s Opinion 1940-42, p. 4129; A.G.'s Opinion 1934-36, p. 1144; rented half of double house not exempt, A.G.'s Opinion 1934-36, p. 1138).

h. When there is more than one tract with a residence on one and a field, pasture or garden on the other, tract must actually be used as a field, pasture or garden to be eligible for exemption, taxpayer must personally use the field, pasture or garden, and, if the tract is let out to another, it is not exempt (A.G.'s Opinion 1940-42, p. 1660).

G. Special Assessment Level

1. The assessment of residential property receiving the homestead exemption which is owned and occupied by any of the following and who meet all of the other requirements of this Section shall not be increased above the total assessment of that property for the first year that the owner qualifies for and receives the special assessment level provided that such person or persons remain qualified for and receive the special assessment level:

a. people who are 65 years of age or older;

b. people who have a service-connected disability rating of 50 percent or more by the United States Department of Veterans Affairs;

c. members of the armed forces of the United States or the Louisiana National Guard who owned and last occupied such property who are killed in action, or who are missing in action or are a prisoner of war for a period exceeding 90 days; or

d. any person or persons permanently totally disabled as determined by a final non-appealable judgment of a court or as certified by a state or federal administrative agency charged with the responsibility for making determinations regarding disability.

2. Any person or persons shall be prohibited from receiving the special assessment as provided in this Section if such person's or persons' adjusted gross income, for the year prior to the application for the special assessment, exceeds $100,000 for tax year 2021 (2022 Orleans Parish). For persons applying for the special assessment whose filing status is married filing separately, the adjusted gross income for purposes of this Section shall be determined by combining the adjusted gross income on both federal tax returns.

3. An eligible owner shall apply for the special assessment level by filing a signed application establishing that the owner qualifies for the special assessment level with the assessor of the parish or, in the parish of Orleans, the assessor of the district where the property is located.

4. The special assessment level shall remain on the property as long as:

a. that owner, or that owner's surviving spouse who is 55 years of age or older or who has minor children, remains the owner of the property, and:

i. the owner who has a service-connected disability of 50 percent or more, or that owner's surviving spouse who is 45 years of age or older or who has minor children, remains the owner of the property;

ii. the spouse of the owner who is killed in action remains the owner of the property;

iii. the first day of the tax year following the tax year in which an owner who was missing in action or was a prisoner of war for a period exceeding 90 days is no longer missing in action or a prisoner of war; and

iv. even if the ownership interest of any surviving spouse or spouse of an owner who is missing in action as provided for in this Subparagraph is an interest in usufruct;

b. the value of the property does not increase more than 25 percent because of construction or reconstruction.

5. A new or subsequent owner of the property may claim a special assessment level when eligible under this Section. The new owner is not necessarily entitled to the same special assessment level on the property as when that property was owned by the previous owner.

6. The special assessment level on property that is sold shall automatically expire on the last day of December in the year prior to the year that the property is sold. The property shall be immediately revalued at fair market value by the assessor and shall be assessed by the assessor on the assessment rolls in the year it was sold.

7. A usufructuary is entitled to the benefit of the special assessment level attained by the prior owner/occupant, provided that either:

a. the usufructuary is the owner's surviving spouse, occupying the house, who is 55 years of age or older or who has minor children, and the value of the property does not increase more than 25 percent because of construction or reconstruction; or

b. the usufructuary is the immediate prior owner of the homestead and the homestead is occupied by such usufructuary. A usufructuary is entitled to the special assessment level freeze if and when he or she qualifies independently.

8. The special assessment level, like the homestead exemption, should be applied to the extent of a homeowner's undivided interest in the occupied property.

9. Any owner entitled to the special assessment level set forth in this Paragraph who is unable to occupy the homestead on or before December 31 of a future calendar year due to damage or destruction of the homestead caused by a disaster or emergency declared by the governor shall be entitled to keep the special assessment level of the homestead prior to its damage or destruction on the repaired or rebuilt homestead provided the repaired or rebuilt homestead is reoccupied by the owner within five years from December 31 of the year following the disaster. The assessed value of the land and buildings on which the homestead was located prior to its damage shall not be increased above its assessed value immediately prior to the damage or destruction described in this Subparagraph. If the property owner receives a homestead exemption on another homestead during the same five-year period, the damaged or destroyed property shall not be entitled to keep the special assessment level, and the land and buildings shall be assessed in that year at the percentage of fair market value set forth in this constitution. In addition, the owner must also maintain the homestead exemption set forth in Article VII, Section 20(A)(10) to qualify for the special assessment level in this Subparagraph.

La. Admin. Code tit. 61, § V-101

Promulgated by the Department of Revenue and Taxation, Tax Commission, LR 8:102 (February 1982), amended LR 15:1097 (December 1989), amended by the Department of Revenue, Tax Commission, LR 24:477 (March 1998), LR 26:506 (March 2000), LR 31:700 (March 2005), LR 32:425 (March 2006), LR 33:489 (March 2007), LR 34:673 (April 2008), LR 35:492 (March 2009), LR 36:765 (April 2010), amended by the Office of the Governor, Division of Administration, Tax Commission, LR 37:1394 (May 2011), LR 38:799 (March 2012), LR 39:487 (March 2013), LR 40:528 (March 2014), amended by the Office of the Governor, Division of Administration, Tax Commission, LR 41671(4/1/2015), Amended by the Office of the Governor, Division of Administration, Tax Commission, LR 42744 (5/1/2016), Amended LR 43648 (4/1/2017), Amended by, LR 44577 (3/1/2018), Amended by the Division of Administration, Tax Commission, LR 45531 (4/1/2019), Amended LR 46560 (4/1/2020), Amended LR 47456 (4/1/2021).

AUTHORITY NOTE: Promulgated in accordance with the Louisiana Constitution of 1974, Article VII, §18