HB1775
To Prohibit The Separate Valuation And Assessment Of An Accessory Dwelling Unit For Purposes Of Property Taxes; And To Amend The Method Of Valuation For Certain Residential Property Under Arkansas Constitution, Article 16, § 5.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
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AI-Generated Summary
House Bill 1775 amends Arkansas law to regulate the property tax assessment of accessory dwelling units (ADUs). The bill prohibits residential property used as an owner's principal residence from being subdivided into multiple parcels for the purpose of creating a separate parcel for an ADU. It mandates that any ADU located on the same parcel as a primary single-family residence must be valued and assessed as part of a single parcel of residential property. An ADU is defined as a secondary, smaller, independent dwelling unit owned by the same person as the primary residence. The act applies to assessment years beginning on or after January 1, 2026.
Potential Impact Analysis
Who Might Benefit?
Homeowners who currently possess or intend to build accessory dwelling units on their property benefit from this bill, as it ensures these units are not taxed as separate parcels, which could potentially lead to higher property tax valuations or bureaucratic complications. This provides clarity and simplifies the tax assessment process for property owners by treating the primary residence and the ADU as a single integrated tax unit.
Who Might Suffer?
County tax assessors and local government revenue departments may be negatively impacted as the bill limits their flexibility in assessing and valuing property, potentially restricting their ability to capture increased property value through separate parcel assessments. Additionally, local jurisdictions that seek to maximize property tax revenue through separate parcel identification for additional dwelling units may experience a reduction in potential tax growth from residential properties containing ADUs.
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