Property values increasing....Property tax going up! (Miami: short sales, real estate)

[hurricaneMan1992]

Regarding the Herald article: Good News for Miami-Dade: Property Values are Increasing.

Anybody else feel as I do that this is NOT good news? Our property tax system needs an overhaul!

The purpose of property taxes is to pay for city and State government services. The actual cost of these services should be controlling property taxes, not property values. What property values should determine is the proportional distribution of the tax burden, but not the total tax burden. (But even this is not quite fair, since schools, police, firemen, and trash collection for a 2000 square foot home is the same regardless of whether it happens to be valued at $200k or $500k or $1M). When property values go up faster than the cost of city services, millage rates need to come down.

The thing as we learned just a few days ago is local governments tend to overspend and get bloated when they get a "windfall" from the real estate boom, but they cannot maintain this level of services when the market inevitably cools down. Under this plan, local government officials would be encouraged to keep operating costs in check, because not decreasing millage rates when property values go up would not bode well for their next election.

Meanwhile, due to Save Our Homes, the difference in property tax between new home purchases and long time residents only gets worse. It also affects your ability to sell if you need to do so. Property tax should not be run like a Ponzi scheme!

[tallrick]

Just like I predicted. Never fear, the Fed's latest bubble is going to pop like they all do. This time there will be no recovery.
DORIS DAY - I'M FOREVER BLOWING BUBBLES 1951 - YouTube

[straight shooter]

The thing with property values is that it is a double edge sword. It is good that property values go up because that means that your home is worth more but at the same time what good is it if you have to spend more on your next home and property taxes go up. You just don't win.

[hurricaneMan1992]

It's best if property values go up slowly and actual fundamentals: like good, old-fashioned job growth, infrastructure improvements, and economic development. You're home's value is not a bank account or investment account! If my home value increases 20% in 10 years, that's good when I go ahead and sell, but if it goes up that much in 2-3 years, it's pretty useless--if anything it hurts me long term because some of my neighbors will be overpaying and there will be foreclosures and deferred maintenance issues in the neighborhood.

Some homes I've been looking at recently are un-sellable in today's market because people took out second mortgages and are underwater by "only" $10-20k, the home won't appraise for enough to cover both mortgages, and banks are reluctant to approve short sales for such "little" amount. No cash buyer is going to overpay by $10-20k. Meanwhile...their property taxes went up since they did some improvements to the property, and if they're looking to downsize, it's not practical, since they're still responsible for the both mortgage payments.