What is the definition of Legal Residence?
Legal residence refers to the special assessment ratio of 4% for owner-occupied homes. For property tax purposes the term “Legal Residence” shall mean the permanent home or dwelling place owned by a person and occupied by the owner. A residence does not qualify as a legal residence unless the residence is determined to be the “domicile” of the owner-occupant. A person or married couple may have only one legal domicile. Legal residence shall not include a residence maintained principally for vacation or recreational purposes.
This item does not apply unless the owner of the property or the owner’s agent applies for the four percent assessment ratio before the first penalty date for the payment of taxes for the tax year for which the owner first claims eligibility for this assessment ratio.
To qualify for the special property tax assessment ratio, the owner-occupant must have actually owned and occupied the residence as his legal residence and been domiciled at that address for some period during the applicable tax year. A residence which has been qualified as a legal residence for any part of the year is entitled to the four percent assessment ratio provided in this item for the entire year, for the exemption from property taxes levied for school operations pursuant to Section 12-37-220(47)(a) for the entire year. Owner-occupied residential property receiving the legal residence special assessment is exempt from all school operation taxes, but not millage imposed for the repayment of general obligation debt.
The legal residence and not more than five acres contiguous thereto, when owned totally or in part in fee or by life estate and occupied by the owner of the interest, and additional dwellings located on the same property and occupied by immediate family members of the owner of the interest, are taxed on an assessment equal to four percent of the fair market value of the property.
If residential real property is held in trust and the income beneficiary of the trust occupies the property as a residence, then the assessment ratio allowed by this item applies if the trustee certifies to the assessor that the property is occupied as a residence by the income beneficiary of the trust.
If this property has located on it any rented mobile homes or residences which are rented or any business for profit, this four percent value does not apply to those businesses or rental properties.
Beware of Penalties, Interest, and Additional Tax Bills!
If a person signs the certification, obtains the four percent assessment ratio, and is thereafter found not eligible, or thereafter loses eligibility and fails to notify the assessor within six months, a penalty is imposed equal to one hundred percent of the tax paid, plus interest on that four percent amount at the rate of one-half of one percent a month, but in no case less than thirty dollars nor more than the current year taxes. This penalty and any interest are considered ad valorem taxes due on the property for purposes of collection and enforcement.
The penalty is 100% of the tax paid, plus interest on the four percent payment – And additional-tax bills for the correct tax amount at six percent for up to ten years.