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HB 2038

Authorizes the "Missouri Homestead Preservation Tax Credit Program" and implements a homestead exemption for certain individuals

2026 Regular Session Introduced by Marlene Terry

HB 2038 would provide two state-backed property tax relief programs for seniors and disabled homeowners, offering a 100% homestead tax exemption and an annual credit for tax increa

Referred: Emerging Issues(H)
#elderly #property #realandpersonal #revenue #departmentof #taxcredits #taxationandrevenue-general #taxationandrevenue-property
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Bill Summary · HB 2038

Summary of HB 2038 (Missouri, 2026)

Purpose and main intent

HB 2038 creates two property tax relief programs aimed at vulnerable homeowners and seniors. It establishes:
- A statewide “Missouri Homestead Preservation Tax Credit Program” (the Homestead Preservation Credit) that would provide a 100% exemption of the assessed tax on a qualifying homestead, starting in 2027, with annual reapplication and a sunset after six years.
- A separate program titled “The Missouri Homestead Preservation Act” that offers a homestead exemption credit to eligible homeowners (primarily seniors 65+ or disabled) to offset year-over-year increases in property tax liability that exceed a specified exemption limit. This program also starts in 2027 and sunsets after six years.

Key provisions and changes

  • 137.104 – Eligibility for the Homestead Preservation Credit

    • Eligible owner: 65+ as of Jan 1 of the determining odd-numbered year; owns or has a legal/equitable interest in a homestead; liable for real property taxes; total household income ≤ $125,000 (adjusted annually for inflation).
    • Homestead: primary residence plus up to 5 adjacent acres, as reasonably necessary.
    • Exemption: 100% of the tax assessed on the homestead (applied for tax years beginning Jan 1, 2027).
    • Application: annual renewal required; prior year credits and other tax relief credits are mutually exclusive for the same year.
    • Administration: rules by the Missouri State Tax Commission; nonseverable linkage to constitutional and sunset provisions.
    • Sunset: six years unless reauthorized.

  • 137.107 – The Missouri Homestead Preservation Act (credit for increases)

    • Eligible owner: 65+ or disabled; income up to a defined maximum (maximum upper limit, initial reference year $70,000 in 2005 adjusted annually).
    • Eligibility in various ownership forms (sole, joint, trust arrangements): specifics on how income and ownership are treated. Homestead: defined similarly to 137.104. Homestead exemption limit: the annual percentage increase in tax liability (excluding improvements) that triggers an offset via a credit.
    • Credit: if prior-year liability rose beyond the limit, eligible owner(s) receive a credit to offset the excess in the current year.
    • Application window: April 1 to October 15 each year; requires attestation of age, income, homestead address, and improvements within 5% of assessed value (unless improvements were for a disabled person); must attach receipts of property tax payments for three prior years. Administration: by the State Tax Commission; lists of eligible owners provided to county assessors; coordination with counties for disbursement. Sunset and funding: six-year sunset; annual appropriation required; apportionment based on available funds.

  • Sunset and funding mechanics

    • Both programs are subject to the Missouri Sunset Act (six-year duration).
    • Funding and apportionment depend on annual legislative appropriations; credits are distributed to offset property tax payments.
    • If funds are not appropriated, no credit is issued.

Who would be affected

  • Eligible homeowners (primarily age 65+, or disabled under the second program) with low-to-moderate income who own and occupy a qualifying homestead.
  • Counties and local assessors/collectors, who would administer applications, determine eligibility, and disburse credits.
  • Property taxpayers who meet the criteria could receive significant reductions or offsets in their property tax bills.

Timelines and procedural aspects

  • Effective for tax years beginning January 1, 2027.
  • Annual applications required for the Homestead Preservation Credit; for the credit program, applications open April 1 and close October 15 each year.
  • Administrative rules to be promulgated by the State Tax Commission; coordination with county officials is required.
  • Both programs sunset six years after the act’s effective date unless renewed by the General Assembly.

Overall, HB 2038 aims to shield vulnerable homeowners from steep tax increases and preserve home ownership by providing substantial, annually managed property tax relief.

Compiled from official sources — confirm details with the bill’s official record.

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