When purchasing a home in Alaska, there are certain rules and laws that must be followed to ensure the transaction will be legal and valid.
Home seller and buyer laws
Unlike many other states that require disclosure before the sale is final, Alaska requires full disclosure on a property before buyers can even make a written offer on the home. The state has a nine-page form with a checklist of all of the items regarding a home’s condition and maintenance that must be disclosed upfront. These items include property features, structural components, drainage, leakage, fireplace or wood stove, heating and sewer systems, water supply, utility costs, setbacks and restrictions, environmental concerns, improvements and pest control, among others.
Whether a state is a judicial or non-judicial foreclosure state determines how a home is handled in the event the owner fails to pay the mortgage as agreed. In Alaska, while both judicial and non-judicial foreclosure processes are available, most foreclosures are non-judicial. Rather than going through the court system in front of a judge, the foreclosure is handled outside of court by a trustee.
In Alaska, in the event of divorce, all real and personal property considered marital property will be divided equitably, but not necessarily 50/50, between the parties. In general, marital property is considered to be any property accrued after the date of the marriage until the date of separation. Other property, such as that received through inheritance, Social Security benefits and military disability payments, is not considered marital property.
When deciding how to divide property in a divorce, the judge will consider a number of factors including but not limited to the length of the marriage, the parties’ station in life during the marriage, the age and health of each party, the parties’ earning capacities, the parties’ financial situation and the parties’ conduct as it relates to marital debt and assets.
When purchasing a home in Alaska, you do not need an attorney present at the closing transaction. Instead, as an escrow state, an escrow agent, closing agent or title company representative will complete the transaction.
While many states charge transfer taxes on a real estate transaction, Alaska does not; it is one of the 13 states that does not have this tax.
In Alaska, the median property tax rate is 1.04% of a home’s assessed fair market value. This equates to a median property tax of nearly $2,724 per year for a home with the current median value of $261,900. However, given how large the state is and the various population centers, those values vary greatly depending on location and property value.
For instance, those living in Anchorage pay the highest property taxes, with an average of $3,563 due per year. However, in the southern portion of the state in the Hoonah-Angoon Census Area, annual property taxes average just $678.
In Alaska, the state mandates an exemption up to the first $150,000 of assessed value on the primary residence of two key groups: residents age 65 and older, and disabled veterans with a service-related disability level of 50% or more. There is a deadline for applying for this exemption, which is dictated by the local municipality. However, the municipality has the option of waving this deadline with good cause.
Per Alaska state law, there are additional exemptions available, but these are not mandatory and must be implemented at the local level. For instance, an exemption of up to $50,000 of a primary residence may be applied by a municipality. This exemption may be applied on top of the state’s mandatory exemption for senior citizens and disabled veterans, providing additional tax savings for them. When purchasing a home, you should call the local tax assessor’s office to find out what exemptions are available to you.
Conforming loan limits
Throughout the state of Alaska, the maximum conforming loan limit is $726,525 for one-unit properties.
Simply put, a conforming loan meets all terms and conditions as required by Fannie Mae and Freddie Mac, which include qualifying requirements for borrowers, maximum loan amounts and suitable properties for mortgages.