State Question 676
State Question 676 - Five% Value Limitation
This measure amends Article 10 of the Oklahoma Constitution. It adds a new section 8B. This measure limits the fair cash value of real property for property tax purposes. The fair cash value would not increase by more than 5% in any taxable year. This limit would only apply to real property which is assessed by a county assessor. If the property is transferred, changed, or conveyed, the limitation would not apply for that year.
The limitation does not apply if improvements have been made to the property. If improvements have been made to the property, the increased value to the property will be assessed for that year. Any county which is not in compliance with laws or regulations governing valuation of property would not be allowed to apply the 5% limitation. This measure does not apply to personal property. The measure does not apply to property valued or assessed by the State Board of Equalization. The legislature would be allowed to enact laws to implement this section. This measure takes effect on January 1, 1997.
State Question 676 Summarized
The 5% limitation is not an automatic increase every year for every property. The limitation is utilized for those properties where the true market value is more than the limited or capped taxable value. This concept was confirmed by the attorney general in an opinion in September of 2001. To see the full outline of the Attorney General's opinion click here Attorney General Opinion.
The 5% limitation is not an automatic increase every year for every property. The limitation acts as a "phase-in" tool to hold back substantial increases when there is a strong demand in the real estate market causing rapid increases in property values. When market conditions reflect that property values have increased greater than 5% the limitation allows only a gradual increase rather than the true increase based on the market value.
Actual property taxes can increase by more than 5%. The 5% limitation relates only to real property value not property tax. Increases in millage rates, which are used in calculating property taxes, usually are a result of a vote from bond issues that may be county wide and/or related to a particular city or school district. These voter approved issues have no bearing on the 5% limitation law.