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Here is a good explanation: Property Tax Primer, By Charlie Moore, Thursday, 29 January 2009: Here is a good explanation: Property Tax Primer, By Charlie Moore, Thursday, 29 January 2009. ABQNews: Property Tax Primer (http://www.abqjournal.com/abqnews/as-seen-in-the-journal/10312-property-tax-primer.html - broken link)
Even with the pending legislation, there is still a looming injustice:
Say, for instance, they put a 3% cap on all future increases, but don't address the past lightning increases. That creates a situation where two identically priced homes might have vastly different property taxes, depending on when the property was last sold. Now, imagine you're a property owner trying to sell a $300K home, but with property taxes twice what your neighbor with the same home pays!
So what's the solution...roll back all lightning increases? Hardly feasible, esp. with the current economic malaise and budget deficit. They'll never do it.
Keep the lightning tax? A lot of other states currently do that, and many think that's the most fair. If you already live in a state, you're 'grand-fathered" in. Let the new folks pay taxes based on what they "bought in" for. They have the choice to move there or not.
How about keeping the lightning tax, but only for new construction? This might be the most fair, and a good way to balance growth with the huge number of infrastructure $$$ needed. In many states, developers pay impact fees. Levying lightning tax increases on new construction only would require new home buyers to share the enormous cost of building new roads, sewer & water, etc. with the developer, and provide adequate tax revenue to maintain the infrastructure as well. Of course, it' not technically a lightning tax increase since it's a new home, so esentially it would be a property tax based on the full value of the new home.
When we bought in Albuq, our tax went from about $1400 to $2500 in one year, which we then payed for another year and a half. Somehow I doubt we'll ever see that money again...
One of the things we DON'T want to do is have a steadily rising tax that can
force limited income owners to sell because they can't afford the property tax.
Where we lived in Virginia, all residential property tax was based on an annual
value assessment conducted by the local government office who was being
funded by that very tax.. (how do you spell "conflict of interest"?). Long-term
residents (20-30 years) might have paid $50,000 for a house that was now valued
at $700,000 and their original tax bills of @ $400 a year had zoomed to almost $7,000.
That's absolutely devastating to a fixed-income retiree.. and BTW, those numbers
are NOT theoretical, they are quite real.
So whatever is done has to ensure that people are not forced to sell their homes
because of excessive taxes and that pretty much excludes altering the
tax basis on current homes.
Maybe we should look at "tax lightning" being a benefit of long-term residency
rather than a penalty imposed on new purchasers?
Mike, I know two families who were pretty much driven out of their home state of Massachusetts because of rising property tax's over the years. The taxes became ridiculous.
I grew up in Florida and my mom still lives there. FL has what is called homestead exemption which I took for granted, your taxes are reduced after you have lived in a house a period of time (I really don't know the details), but my mom's taxes in FL are reasonable. There are many reasons people retire in Florida...
I lived/worked in the VA area for a few years. Expensive, yes, but there were good paying jobs, and some people loved it. It was OK for a while. And DC was the number one place to live in those best places to live articles. Sometimes it is truly difficult to evaluate actual costs of living, andwhat you are willing to pay for it.
Mike, I know two families who were pretty much driven out of their home state of Massachusetts because of rising property tax's over the years. The taxes became ridiculous.
Rich
We lived in Alexandria where I grew up until we retired. If we had stayed in the
same house we had purchased in 1987, we would be paying close to $6,000
MORE in tax than when we purchased it because the tax was based on current
assessed value without the percentage of increase cap that taxes here have.
As far as trade-offs go, Albuquerque will never have the range of cultural activities,
restaurants, shops, etc., etc., etc. that the DC area does, but we're so much
happier here that (at least for us) the trade-offs for what the Southwest has to
offer was a no-brainer.
Having grown up in NoVa, I'm pretty well positioned to see the enormous and
primarily negative impact that out-of-control growth has had on the region so
I just can't conceive of DC being rated one of the "best places to live". A very
good place for upscale professional growth, yes, absolutely, but so much has
been lost...
I completely agree with you guys about the negative effect rising taxes can have on fixed-income retirees. I also like the emphasis on lower taxes as a benefit of long-term residency, vs. higher taxes as a penalty on first-time buyers - thanks for pointing that out Mike.
MD currently has a homesteader tax exemption - after 1 yr. of residency, you get a "rebate" on your taxes. We'll probably get about $700-800 back next year based on a tax bill of about $4200. Not huge, but every little bit helps.
p.s. Poncho, I had noticed the same thing about my post, eg. "lightning tax on a new home." Check the end of my 5th para...long-winded post, I know...
I see, so just look at the sale price of the house and figure taxes from that dont just look at what the old owner paid, makes sense, what I would do anyway.
Good luck EnjoyEP.....keep us posted. It will warm up here sometime in August I think
I see, so just look at the sale price of the house and figure taxes from that dont just look at what the old owner paid, makes sense, what I would do anyway.
Good luck EnjoyEP.....keep us posted. It will warm up here sometime in August I think
Yes because the previous owner may have had exemptions that you do not qualify for.
When we bought our first house in a different state, the previous owner had a homestead exemption and some sort of senior citizen exemption. We would be getting neither, since my husband, who was on the title, was not a resident of that state.
The only place I ever saw property tax information from the seller was on the MLS, which was based on what the seller told the seller's agent, which could be the seller's best guesstimate of what he/she paid the previous year. My realtor told us when we bought our first house to ignore that number because it was often a guess and to figure out the property tax ourselves.
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