Catch Title: HB0073  Residential Real Property – Fair Market Value on Transfer

Category: Taxation

Sponsor: Joint Revenue Interim Committee

Effective Date: [Contingent] The act is only effective if voters adopt the constitutional amendment provided in 2026 House Joint Resolution 0004. If approved, the valuation changes take effect January 1, 2028.

Bill URL: https://wyoleg.gov/2026/Introduced/HB0073.pdf

Overview:

HB0073 proposes a fundamental shift in Wyoming’s property tax system for residential real property, moving from a market-value system to an acquisition-based “base year value” system. Under this bill, the assessed value of a home is “locked in” at its value at the time of purchase and is capped for annual increases until the property is transferred to a new owner.

Key Provisions:

• Three-Tiered Base Year Valuation:
  • Tier 1: Properties acquired on or before December 31, 2019, are assigned a base value equal to their fair market value on January 1, 2019.
  • Tier 2: Properties acquired between 2020 and 2027 are valued at their fair market value on January 1 of the year they were acquired.
  • Tier 3: Properties acquired on or after January 1, 2028, are valued based on the price paid to acquire the property (subject to a rebuttable presumption).
• Annual Inflation Cap: Once the base year value is set, annual increases are capped at the lesser of 2% or the rate of the Consumer Price Index (CPI).
• State-Wide Value Index: The Department of Revenue must create an index to track if property values are decreasing; if values drop, the assessed value must be reduced at the same rate.
• Full Market Reset on Transfer: Whenever residential property is transferred to a new person, the “base year” resets to the current fair market value/purchase price.
• Exclusions from “Transfer”: The following do not trigger a tax reset:
  • Transfers between spouses or between parents and children.
  • Transfers to heirs by will or intestate succession.
  • Decrees of divorce or judicial separation.
  • Donations to religious or charitable organizations.
• Entity Transfer Trigger: A change in more than 50% of the ownership of an entity (e.g., LLC or Corporation) holding residential property within one year constitutes a transfer and triggers a tax reset.

Implications:

• “Welcome Stranger” Tax Inequity: This bill creates a significant disparity where long-term homeowners pay drastically lower taxes than new residents moving into identical neighboring homes. [Ambiguous: The bill does not address the long-term impact on local government revenue stability as market values and assessed values diverge over time].
• The “Significant Addition” Loophole: While new construction or “significant additions” increase the base value, the bill explicitly excludes “finishing an unfinished portion of the existing dwelling” from this definition. This allows homeowners to increase the usable square footage and value of their home without triggering a taxable increase beyond the 2% cap.
• Sales Price Disclosure Conflict: By creating a rebuttable presumption that the “price paid” is the fair market value, the bill may effectively mandate sales price disclosure for residential properties—a departure from Wyoming’s history as a non-disclosure state.
• Limited Scope: The bill defines “residential real property” as dwellings designed to house not more than three (3) families used as a primary residence. This means the acquisition-based protections do not apply to large investment groups or multi-family apartment complexes.
• Administrative Discretion: The Department of Revenue is granted broad authority to define through rulemaking which other types of transfers should not be considered “acquisitions” due to the relationship between the parties.