Anchorage Assembly to vote on 10-year tax break for first-time homebuyers

First-time buyers of new Anchorage starter homes could receive a full 10-year property tax exemption, covering both municipal and school district levies, under an ordinance the Anchorage Assembly is scheduled to vote on June 23. The exemption would apply to units sold at or below $496,746, the average assessed value of a single-family home in the municipality according to the 2026 Property Appraisal Annual Valuation Report. The ordinance ties the cap to the most recent annual average assessed value on an ongoing basis.

Anchorage home prices rose 40% between 2020 and 2025, according to the ordinance's preamble. The National Association of Realtors put the average age of a first-time homebuyer at 40 in 2025, up from the late 20s in the 1980s. New construction in the city averages more than $650,000, according to the administration's memorandum, meaning the price cap is designed to pull builder incentives toward the lower end of the market. If passed, the ordinance would take effect immediately.

The Ordinance

AO 2026-89 was submitted by the chair of the Assembly at the request of Mayor Suzanne LaFrance and would enact Anchorage Municipal Code Chapter 12.110. The exemption applies only to the newly constructed portion of a qualifying unit, not the land. Owners must occupy the property as their primary residence. Properties used as short-term rentals are barred from the program.

Builders must apply before a Certificate of Occupancy is issued. Construction must be completed and a Certificate of Occupancy issued within five years of provisional approval. All construction must comply with state and federal wage, labor, and worker safety standards, a condition required for both provisional and final approval. The program accepts applications through 5:00 p.m. August 31, 2031. The exemption runs with the parcel and transfers once to a qualifying first-time buyer when ownership changes hands.

Decisions by the municipal assessor may be appealed in writing to the chief fiscal officer within 30 days. Decisions of the chief fiscal officer may be further appealed to an administrative hearings officer under AMC 3.60, also within 30 days.

Owners must file annual compliance reports with the municipal assessor by March 15 each year. The assessor is also required to transmit annual reports to the Assembly summarizing total taxes exempted for each property and the status of all applications, including units proposed, under construction, and completed. Violations can trigger penalties of up to three times the value of exemption received. The exemption terminates automatically if an owner fails to file the annual report for three consecutive years. Voters could repeal the ordinance by referendum if adopted.