Idaho's 2026 Session: Every Property Tax and Housing Bill That Passed

Eliminates proration of the homestead property tax exemption

Removed provisions requiring the homestead exemption to be prorated when a property's eligibility status changed mid-year. The full exemption now applies as of January 1 of the tax year a complete application is submitted and approved. The change made an inconsistently-administered process consistent.

House 68–0 · Senate 32–0 · Rep. Dustin Manwaring (R)

Limits local regulation of short-term rentals

Tightened existing limits on city and county authority to regulate short-term rentals (Airbnb-style listings), allowing local regulation only in cases of public health and safety. Framed by sponsors as protection for homeowners' rental rights.

House 54–16 · Senate 23–12 · (Floor sponsor)

Allows accessory dwelling units (ADUs) under objective state standards

Treated ADUs as a residential use allowed by-right under Idaho's Local Land Use Planning Act, preempting cities from banning or unreasonably restricting them. Also voided restrictive covenants that ban ADUs.

House 47–23 · Senate 25–10 · Sen. Ben Toews (R)

Raises fire and ambulance district property tax growth caps

Increased the cap on annual property tax growth for fire-protection and ambulance-service districts from 8% to 15%, contingent on enough new construction or annexed territory to cover the cost. Also added a voter-initiative path for residents to raise or lower these district budgets (same two-thirds threshold the law already uses for other property-tax overrides).

House 67–0 · Senate 33–0 · Rep. Mike Moyle (R)

Apportions late-tax fees and interest to taxing districts

Codified the 2025 Idaho Supreme Court decision requiring that fees and interest collected on delinquent property tax payments be distributed proportionally to each taxing district, rather than retained by the county. Resolves a long-running collection-distribution dispute.

House 69–0 · Senate 31–0 · Rep. Richard Cheatum (R)

Removes a property tax incentive in wind and geothermal revenue distribution

Changed the formula by which wind and geothermal energy tax revenues are distributed to local taxing districts. Under prior law, distribution was tied to whether school districts had passed supplemental levies — which sponsors said created an incentive for school districts to pass property tax levies primarily to qualify for energy revenue. The bill replaces that incentive structure with a county-levy-rate-based calculation.

House 62–6 · Senate 34–0 · Rep. Ben G. Fuhriman (R)

Clarifies taxable value calculations for fire and ambulance districts

Technical correction for calculating taxable values of fire-protection and ambulance-service districts that fall outside urban renewable district revenue allocation areas. Companion to H0959.

House 68–0 · Senate 31–0 · Rep. Richard Cheatum (R)

Annual federal tax conformity update

Updated Idaho income tax code's references to the federal Internal Revenue Code for the 2025 tax year. Conformed Idaho to the "One Big Beautiful Bill" with two carve-outs Idaho has historically maintained: bonus depreciation, and the existing R&D-expenditure amortization schedule for 2022–2024 expenses. Most relevant to businesses and individuals filing 2025 returns in early 2026.

House 59–9 · Senate 28–7 · Rep. Jeff Ehlers (R)

Idaho Parental Choice Tax Credit technical fixes

Clarified the eligibility window for the K-12 parental-choice tax credit (students aged 5–18 at any time during the tax year), defined what counts as enrollment and academic instruction, and clarified that curriculum may be obtained from multiple vendors so long as the combined curriculum provides full academic instruction.

House 44–24 · Senate 23–12 · Rep. Jason Monks (R)

Raises the yard-sale sales tax exemption

Previously an individual could hold only two yard sales per year before being required to collect sales tax. The bill removed that count limit while keeping the existing $5,000-per-year total-revenue threshold from the small-sellers law. Above $5,000 in annual yard-sale revenue, the seller is required to collect.

House 65–0 · Senate 34–0 · Rep. Jason Monks (R)