By Chris Story
Originally published on Story Real Estate on 10/28/2025.
We often hear that taxpayers have a right to a fair property tax system. But fairness in taxation isn’t simply a right we claim. It is a duty that comes with living in a free and self-governing society.
The Constitution gives us more than rights. It gives us responsibilities. One of those is to help build and protect a fair system of taxation that serves the common good.
A fair tax must be based on real value, not speculation or hypothetical gains. When property is taxed on what it might be worth, rather than what it truly is, that crosses a line into injustice.
The Fifth Amendment reminds us why this matters. It declares that private property cannot be taken for public use without just compensation. When the government taxes unrealized or inflated value, it begins to look like a taking without compensation.
Standing up for property taxes grounded in real market value is not rebellion. It is fulfilling our duty as citizens to keep government honest and protect our constitutional promise of fairness.
Below is a copy of the amendment that Representative Sarah Vance submitted to the legal review department in Juneau in June.
As of this writing, she has yet to receive any response:
THE FAIR TAX ACT
Alaska Property Tax Reform Law
An Act amending Title 29 of the Alaska Statutes to establish a fair, equitable, and predictable property taxation system based on realized gains and base-year assessment.
Section 1 – Purpose and Intent
This Act shall be known as The Fair Tax Act.
The purpose of this Act is to reform the property tax system in Alaska to:
- Eliminate taxation on unrealized gains
- Establish a base-year value assessment method
- Cap annual property tax increases
- Protect long-term property owners, including seniors and the disabled
- Ensure fairness, predictability, and alignment with a property owner’s ability to pay
Section 2 – Amendment to Title 29: Property Tax Assessment Reform
Sec. 29.45._. Base-Year Value System
(a) Property tax assessments for all real property subject to municipal taxation in the State of Alaska, excluding oil and gas properties, shall be based on the fair market value assessed in the 2019 tax year (the “Base Year Value”).
(b) Upon purchase or transfer of property, the property shall be assessed based on the purchase price, which establishes a new base year for the new owner.
(c) Market-driven value increases shall not be used to reassess properties unless triggered by a qualifying event outlined in this section.
Sec. 29.45._. Reassessment Upon Ownership Transfer
(a) A reassessment shall occur upon the sale or transfer of real property and shall be based on the recorded purchase price.
(b) The following transfers shall not trigger a reassessment:
Transfers between spouses or registered domestic partners
Transfers between parents and children or grandparents and grandchildren, provided the transferee maintains the property as a primary residence
Transfers via inheritance or estate settlement, provided the inheritor maintains the property as a primary residence
Sec. 29.45._. Property Tax Rate Limitation
(a) Annual property tax mill-rate increases shall be limited to 0.01 mills per year.
(b) Any municipal proposal to increase rates beyond this threshold must be approved by a supermajority vote of the municipal governing body.
Sec. 29.45._. Senior Citizen and Disability Exemption
(a) An individual who is age 65 or older or permanently disabled, and who meets Alaska residency requirements, shall be exempt from property tax on their primary residence.
(b) A surviving spouse age 60 or older shall qualify for the same exemption if the deceased spouse qualified for the exemption at the time of death and the surviving spouse meets Alaska residency requirements.
Sec. 29.45._. Prohibition of Taxation on Unrealized Gains
(a) Property tax assessments shall not include increases in value due to speculative or unrealized market gains.
(b) Only realized gains through verified sale or transfer may be considered in reassessment.
Sec. 29.45._. Petition for Reduction Based on Market Value Decline
(a) A property owner may petition the local taxing authority for a reassessment if the current market value is demonstrably lower than the assessed base-year value.
(b) If approved, the assessed value shall be adjusted downward accordingly.
Sec. 29.45._. Severability
If any provision of this Act is found to be unconstitutional or invalid by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.
Section 3 – Applicability
This Act shall apply to all municipalities in the State of Alaska that levy property taxes.
Municipalities may not override or alter the protections established in this Act by local ordinance.
Section 4 – Effective Date
This Act takes effect immediately upon certification of voter approval in accordance with the Alaska Constitution and state election laws.
It all sounds fine, particularly as it pertains to family transfers and exemption by seniors. Yet,the concern being how the amounts of collection currently will be covered by the exemptions and cut outs. The resulting tax collections would seemingly be lower assuming this bill passed, (if accepted for action)
So, where does the legislature look to replace that missing amounts be what it they may be.? One suspects the makeup will come from the usual pot, our share of the PFD in some format the legislature would extract.
The bill looks good up front, but the end result could be a tax or PFD “Shiv” to the backside.
Cheers,