What effect will the Arkansas Home equity Living Plan (A.H.E.L.P.) have on a person's eligibility for tax refunds and deductions under the provisions of the Real Estate Taxes Homestead Exemption Act? 26-51-601 et seq. ANSWER: That person can still get the homestead credit.

STATE OF ARKANSAS OFFICES@RIHE ATTORNEY GENERAL JUSTICE BUILDING, LITTLE ROCK 72201 December 16, 1985 OPINION NO. 85-220 STEVE CLARK ATTORNEY GENERAL (501) 371-2007 Mr. Wooten Epes Executive Director Arkansas Housing Development Agency P.O. Box 8023 Little Rock, AR 72203 Dear Mr. Epes: This letter is in response to your request for an Attorney General's opinion concerning the effect which the Arkansas Home Equity Living Plan (A.H.E.L.P.) will have ona person's eligibility for tax refunds and deductions under the provisions of the Real Estate Taxes Homestead Exemption Act. The Homestead Property Tax Relief Act, Act 63 of 1973, as amended, allows elderly home owners to receive cash rebates or a credit against their State income taxes, for property taxes paid on their homesteads. The amount of each rebate or credit depends on the person's household income for the tax year involved. It is clear that in order to receive a rebate or credit, the homeowner must pay property tax on the home. Under the A.H.E.L.P. program, after a homeowner sells his/her property to the State, he/she may elect to live in ~ the home until death and will receive a monthly annuity " payment based on the present value of the home and his/her life expectancy. After purchasing the home, the State agency becomes responsible for payment of the real property ‘taxes, insurance and other yearly expenses. However, an amount equivalent to the property taxes, insurance premiums and maintenance costs for the property is deducted each month from the amount paid to the homeowner. As a result, the homeowner is in effect paying the property taxes even though the State now owns the home. It is my opinion that since the elderly homeowner participating under the A.H.E.L.P. program still actually pays the property tax on the home, that person may receive a rebate or credit under the Homestead Property Tax Relief Act. The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Jeffrey A. Bell. sinebe ly, / Nt Mo stevit (CLARK Attorney General SC/pw