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That sounds almost the same as California and its Proposition 13.
It's not. I see no value in trying to compare the two.
There are too many variables and other possible issues.
Even if the details vary a lot, I think the intent is the same. The result is
the same. I remember being in the Bay Area where there was sometimes
as much as a 10x difference in taxes for basically identical properties.
Quote:
Originally Posted by Poncho_NM
There are some states where elderly people are being driven
from their home because their property taxes have gone too
high for them to be able to keep their home.
That is why this sort of thing ( tax limits on property ) happens. I think
the intent is to prevent the "driven from their homes" thing from happening.
It is the taxation on autopilot that screws things up.
Why should this tax on wealth just be allowed to go up?
==> because the amount of wealth ( house value ) went up is not a good reason.
It's when the taxpayers let the politicians handle the details that things go haywire.
This could also be done with a permanent lien on the property.
Many retired folks ( if they are doing it right ) retire with no debt.
Having to borrow from the equity might prompt them to sell when they
don't need to. The state shoule also attach a realistic interest rate
to the lien. It's still a debt, but it might not feel like it so some people.
That's in line with a suggestion I (and you?) made months ago. I'd make such a program
subject to some sort of easy to calculate means test and probably cap the interest at one
percent... just enough to cover annual administrative costs. To my way of thinking the
state / county / city would actually be ahead of today's revenue because assessments
would be pretty close to true market value instead of an artificially low valuation so why
not give the geezers a break as in the end, the goobermint will be receiving more than it
would under today's laws.
Even if they were being charged $2,000 a year for 30 years, anyplace worth enough to
build up that kind of total lien is worth enough to still have lots of value to their estate.
There are some states where elderly people are being driven from their home because their property taxes have gone too high for them to be able to keep their home. Rich
My home in Alexandria, Virginia would be an example. I paid $168,000 (give or take a smidgen)
for it in 1988 with an effective property tax rate of @ one percent, just like here.
However the city assessor's office recalced estimated property values annually and by the time
we sold in Spring of 2005, we were paying over three times the amount of our original property tax.
As a result, we never considered staying longer post-retirement than required to sell the place.
And, yes, we did file challenges to their assessments.. three guesses how that came out..
My essential point, however, is that tax lightning, particularly the changes proposed by Martinez, make this an unwise to buy a home. It is a good time to wait and rent and see what shakes out. The law now says people should be informed. I am trying to do that. I don't know whether you agree or disagree with me on this point or this effort.
Democrat Diane Denish and Republican Susana Martinez have different approaches to the tax lightning issue.
There are a lot of good property deals on the market, I would not arbitrarily say it is unwise to buy a home.
This is primarily a relocation site, a site to ask questions and get answres, it is not a site to campaign, advertise or solicit in any fashion. That is a fine line a times. This is a privately owned site, it is not really here for someone to attempt to enforce "The law now says people should be informed.".
Even if interest rates charged were comparable to, say the current
rate on a HELOC, the balance being charged interest would be small.
The first year, using your number, $2,000 at 4% would only work
out to 0.04% of the value of the house ( say a $200k house ).
After ten years, the balance of $24k or so would cost about $1,000
to carry which is only 0.44% of the value of the asset - assuming
the house increased in value by 1% per year, lets say.
That is to say that the benefit accruing to the elderly homeowner
each year from the increase in value exceeds the cost of the benefit
they are getting from the frozen out-of-pocket cost of property tax.
I don't see any reason to give someone who is making/has made
a lot of money on their passive investment whilst you and I have
to pay full value every time we recognize a capital gain.
Mr. and Ms. Geezer never have to pay this bill whilst alive.
That should be good enough for them. It is for me.
What I meant (but wasn't clear enough about) was that the $2k annual tax would still
be accrued at full value ($60k in 30 years) plus one percent per year compounded on
the unpaid balance.
For a fully owned $200k home, that would leave about $130k equity to the estate. I don't
have a roll-up calculator handy so I'm just assuming that the compounded, but very low
rate, interest would wind up being about $10K giving the state @ $70k in lien value and,
for the purposes of this discussion, I'm ignoring appreciation.
Democrat Diane Denish and Republican Susana Martinez have different approaches to the tax lightning issue.
There are a lot of good property deals on the market, I would not arbitrarily say it is unwise to buy a home.
This is primarily a relocation site, a site to ask questions and get answres, it is not a site to campaign, advertise or solicit in any fashion. That is a fine line a times. This is a privately owned site, it is not really here for someone to attempt to enforce "The law now says people should be informed.".
Rich:
I think I can express opinions here. I am certainly not advertising or soliciting or campaigning. And there is no possible way I can enforce anything -- I have absolutely no powers on this board or anywhere else for that matter. I am offering and taking advice and information. Certainly that is permissible.
I hope that I can verbally support compliance with the law. If I implied that I was doing more than that, then that was my factual mistake -- sorry.
You are right that there may be property deals such that one should not pass them up despite unfortunate tax consequences. And every situation should be looked at and costs and benefits weighed. I stand corrected.
However, there is a certain reality* here that affects calculation of costs. Anyone who buys now must consider the possibility* that to quote a newspaper article
IMO the above is information that is entirely relevant to relocation decisions.
I would agree with you that this matter is state law. However, it is no longer uniformly applied across the state since the Bernalillo court decisions prompted the assessor to roll back values in that county. We now have two systems in the state.
Santa Fe has also has some aspects re tax lightning.
1. Tax lightning originated with and is continually supported by one of our politicians, Ben Lujan, the Speaker of the House and pretty much boss of this county.
2 the acceleration in property values (on a higher base to start) has made the dollar amounts at stake quite high.
3. the dollar flow of moneys into government coffers -- coming from a minority of the population -- is staggering. As an example Santa Fe County expenditures doubled in a four year period. I suspect that something similar happened with city expenditures and school board expenditures. The resulting waste I hope is unmatched in other counties in New Mexico.
4. Corruption is rampant and facilitated by the flow of funds, but everyone who might investigate this corruption is of the same party as the perpetrators.
5. our local newspaper maintains a blackout on the issue (tax lightning).
6. if county option is adopted, then IMO this county will stick with tax lightning.
7. I have been advised by lawyers that this is the last place in the state to bring a case challenging the constitutionality of tax lightning. This, of course, is related to point one.
You seem quite knowledgeable. Are you a professional in the real estate arena? (If that seems an intrusive personal question, then please forgive me, and consider it withdrawn.)
*As noted this no longer applies in Bernalillo County. The scarlet letter has been abolished there.
You seem quite knowledgeable. Are you a professional in the real estate arena? (If that seems an intrusive personal question, then please forgive me, and consider it withdrawn.)
I currently own two residences in the Albuquerque area and a residence in Florida. I was part owner of a residence for the first time in 1972 in Arizona. I was a licensed Real Estate in two other states in the past. I have owned a few homes in between. I have worked part time in the past performing real estate repairs, making estimates, photographing real estate and part ownership. I do not consider myself a professional in the real estate arena, I have dabbled in other fields like aircraft repair and sale, computer repair, programming and network installations, and dabbling in a few other part time fields...
I do have some long time friends and associates who are professionals in the real estate arena which I consider experts...
***The real estate industry has also warned that houses with
higher tax bills would be branded with the scarlet letter of a
perpetually higher tax bill, making them harder to sell.***
I also agree with this.
It's always going to be a factor. For someone looking to move within
the state, if they are smart and informed they will take this into
consideration. I have a friend who is currently looking to downsize.
Wouldn't that be ironic if he moved into a smaller place to save money
and all of his utility savings were eaten up by property tax increases.
Back when gas was over $4/gallon, people found that the value of
their V8 SUVs plummeted. It might not have been rational, but it
was the reality of the situation.
It's not. I see no value in trying to compare the two. There are too many variables and other possible issues.
(Comparing CA's Prop 13 to the situation in NM.) Sure it's comparable. You have new homeowners paying higher property taxes than long time homeowners with substantially identical properties. This is caused in part by NM's 3% limitation.
Quote:
Originally Posted by Poncho_NM
"Prop 13 benefit"? Don't know about it, don't really want to know, but it's just one other factor you have to consider.
It's just the benefit of long time homeowners who are paying lower taxes than new owners pay on identical properties.
I don't see how anybody can believe that "sticking it to the new homeowners" is fair. Let's face it, there is some hostility towards people moving in out of state and competing with natives and long term residents. Many people like the idea of making newcomers pay higher taxes.
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