MADISON, Wis. – Today, State Senator Brad Pfaff (D-Onalaska) and State Representative Tip McGuire (D-Kenosha) introduced legislation to provide property tax relief for Wisconsin families.
Under the Wisconsin Circuit Breaker Property Tax Credit, Wisconsin homeowners and renters would be eligible for the tax credit when their property taxes or their rent going toward property taxes exceeds 4 percent of their income. This would provide an estimated $500 in property tax relief to more than one million Wisconsin households. The credit is targeted to help Wisconsin households making less than $150,000.
“Hardworking Wisconsinites know the value of a dollar. We should be working to make life a little easier for our working families, and that starts with property tax relief,” said Sen. Pfaff. “This is a common sense way to provide meaningful tax relief to the people of Wisconsin.”
“Wisconsin has the opportunity to provide meaningful tax relief without racking up a deadly deficit along the way,” said Rep. McGuire, “The Wisconsin Circuit Breaker Property Tax Credit would help ensure housing is more affordable for seniors, working families, and potential new residents.”
Pfaff also said “Property taxes and rent are too high for many Wisconsin families. This tax relief will help those who are struggling most with the high cost of rent and property taxes.”
According to an analysis by the Legislative Reference Bureau, this bill creates a refundable income tax credit for individuals whose property taxes, or rent that constitutes property taxes, exceed 4 percent of household income. The property taxes or rent must be for the individual’s principal dwelling. The bill defines “rent constituting property taxes” to mean 20 percent of the rent if heat is included and 25 percent of the rent if heat is not included.
Under the bill, if the claimant’s household income is less than $100,000, the credit equals a percentage of the amount by which the property taxes, or rent constituting property taxes, exceed 4 percent of household income. The percentage is 10 percent for tax year 2024, 15 percent for tax year 2025, and 40 percent for tax year 2026 and for each tax year thereafter. The credit is phased out for claimants whose household income is at least $100,000 but less than $150,000, and may not be claimed if household income is $150,000 or more.
The credit is reduced by the amount of homestead credit claimed by the individual and no credit may be claimed if the individual or the individual’s spouse claims the veterans and surviving spouses property tax credit. The credit may be claimed only by full-year Wisconsin residents who cannot be claimed as a dependent by another taxpayer. In addition, no individual may claim the credit for any taxable year in which the assessed value of the individual’s property exceeds $1,000,000.
Because the credit is refundable, if an individual is eligible to claim an amount as a credit that exceeds his or her income tax liability, the individual receives the excess as a refund.
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