In Wyoming, Are Two Homestead Exemptions Enough?

If having one property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. exemption is good, then having two is preferable, and three is better still. Or at least, that seems to be the logic of many states, where lawmakers and voters keep piling on new property tax relief measures that rarely cohere and sometimes work at cross purposes. But in Wyoming—Big Wyoming, as they say—it’s “go big or go home,” with voters deciding this November whether to create a choose-your-own-adventure system with three different homestead exemptions.

Taxes should be simple, neutral, transparent, and stable. Wyoming, however, is merely the latest state to offer an alternative: what if we made the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. system more complex, arbitrary, opaque, and volatile?

In 2024, lawmakers adopted a long-term homeowner exemption, which now stands at 50 percent of the first $3 million in market value on primary residences of owners or spouses 65 or older, who have paid Wyoming residential property taxes for at least 25 years, with the condition that they must live in the home at least eight months per year.

In 2025, lawmakers adopted a 25 percent exemption on the first $1 million in market value, both land and structures, for owner-occupants of single-family residential housing who reside in a home at least eight months per year. Those claiming the 50 percent long-term homeowner exemption may not simultaneously claim the 25 percent exemption.

Lower-income households, moreover, can receive property tax refunds. Those with household incomes at or below 125 percent of their county or the statewide median household income, with assets (beyond their home, one vehicle, and retirement accounts) less than about $160,000, receive a refund of the lesser of 75 percent of the previous year’s property taxes or 50 percent of the median residential property tax liability in their county. Those with incomes between 125 and 145 percent of the median household income, and still under the asset limit, receive 65 percent of those amounts. These refunds are subject to appropriations.

This year, voters will decide whether to adopt a third exemption with Proposition 1, worth 50 percent of the assessed value of the home itself (excluding the value of land), with no cap, for those who have been Wyoming residents for at least one year and who lived in the home for at least six months of the preceding tax year. Under anticipatory legislation enacted this year, the new exemption could not stack with the long-term homeowner exemption, but nothing prevents it from being claimed in tandem with the 25 percent exemption, which would allow eligible homeowners to claim an exemption for 25 percent of all value (land and structures), plus another 50 percent of the home’s value.

Owner-occupants of duplexes and other multi-family buildings would be eligible for the new 50 percent exemption but are not eligible for the existing 25 percent exemption. Those who have lived in Wyoming for less than a year are eligible for the 25 percent exemption but wouldn’t be eligible for the new initiative-created exemption. Those who live in a home for at least six months but less than eight months per year could qualify under the new exemption but not the existing ones. And whereas both the 25 percent exemption and the long-term exemption are capped, the new exemption is not. The exemptions also have different application dates, further complicating matters. The existing exemption applications are due March 1, the Proposition 1 application would be due the fourth Monday in May, and refund applications are due the first Monday in June.

This is the wrong way to do tax policy. In tandem, these three exemptions wipe out a significant share of Wyoming’s residential real property tax, forcing Wyoming governments to rely even more heavily on taxes on the oil, gas, and mining industries—a concerning lack of diversification, particularly for industries with high volatility and potential long-term decline.

Consider a $400,000 property, consisting of $325,000 in home value and $75,000 in land value, taxed at the statewide average levy (about 68.5 mills on 9.5 percent of market value). Without any homestead exemptions, annual property taxes would run $2,603. If the homeowners qualify for the existing 25 percent exemption, that trims the property tax bill to $1,952. If Proposition 1 passes, their tax bill gets slashed to $895, with homestead exemptions eliminating almost two-thirds of the household’s property tax liability. If their income is less than 125 percent of the county’s median, they’ll get a refund of up to $671 of that, leaving a net annual tax bill of $224 on a $400,000 property.

That may sound like an incredible deal for homeowners, but it severely undercuts the property tax, and it may seem like a worse deal as local governments scramble to find revenue to fund basic services.

Property taxes, as Gov. Mark Gordon explains in outlining his opposition to Proposition 1, pay for local services that directly benefit homeowners, and they offer a level of local control that other taxes do not. Properties in a community are more valuable because of the services—roads, schools, courts, parks, police, and emergency services—that local governments provide, and if a locality gets the balance wrong, voters can force a correction. If the state eventually has to come in and backfill an eroded property tax baseThe tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. A narrow tax base is non-neutral and inefficient. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates., that local control—and the ability of localities and their voters to make decisions that benefit the community and local property values—will be lost.

No one enjoys paying taxes, but the property tax serves an important purpose, and Wyoming has already implemented significant property tax relief. Proposition 1 would undercut local finances to a degree that would likely force reliance on worse taxes (local or state) and prompt spending cuts that reduce homeowners’ property values.

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