Is Tax Relief for the Elderly Luring New Residents, and Is This a Bad Thing? (mortgage, homes)

[Huckleberry3911948]

eventually the county will experience what other have, a lack of revenue.
the out of state people (probably from here) will suffer the most. leaving family and friends to go far away to live with other old people is a horrible mistake for the old guy.

[Caladium]

Originally Posted by Carlingtonian

I don't believe in property taxes. I think all taxes should be based on income. Think about, say, a guy who works as a schoolteacher. He inherits his parents' farm. The taxes are $15 grand a year. So he has to sell it--most likely to a developer. I don't think that's right.

I don't know what trends are happening in Loudoun, but if this policy is allowing older people who are longtime residents to stay in their homes on fixed incomes (rather than pay ever-increasing property taxes that have recently skyrocketed), then I think that's a good thing.

If the county government needs more money to pay for the new infrastructure needed because of new residents, then the new residents should pay for that, not the people who have been there for 30 years. And my understanding is that the new residents are doing quite well financially.

Three thought provoking points. It would be interesting to see what would happen if there was no property tax for anyone. That could be a strong selling point for bringing more corporations to the county. Also, I agree that new residents (and renters) often use more services than some old guy who's lived on his family farm all his life.

[normie]

Originally Posted by brooklynborndad

I read him as saying seniors are picking Loudoun over, say, Fairfax or MoCo, not that they are picking NoVa over Arizona or North Carolina.

Maybe. Loudoun is more attractive to a lot of retirees than Fairfax or Moco for a lot of reasons, and this could be one more.

I don't know how that fool DelGaudio got elected, and I certainly hope he is not re-elected.

[globalburgh]

In general, artificially holding down property tax encourages speculation and fuels real estate bubbles. Furthermore, the group most benefiting from the policy is the one that likely put it in place. (Like business interests pushing for a corporate tax break) One upside is that you don't have empty nesters dead set against increasing revenue to pay for things like schools (which benefits households with children).

The demographics point towards scrapping the program. Did you see the data in the article?

In 2001, 689 properties were exempt, providing a total of $756,508 in tax relief. The commissioner said that 1,992 properties were exempt by 2010, totaling $6.7 million in relief.

The general population is aging just about everywhere in the country. I recommend getting rid of the exemption but lowering the property tax rate.

[Caladium]

I wonder how many people would have to leave the state if they removed the exemption? It seems unfair to suddenly start taxing people who are now in their 80s and 90s and have planned their savings around this. If they can't pay, what will they do? It's not like this is a great time to be selling the family farm out in a remote part of the county.

[globalburgh]

Originally Posted by Caladium

I wonder how many people would have to leave the state if they removed the exemption? It seems unfair to suddenly start taxing people who are now in their 80s and 90s and have planned their savings around this. If they can't pay, what will they do? It's not like this is a great time to be selling the family farm out in a remote part of the county.

I think the county would have to grandfather the people who already have the exemption. But going forward, the program is unsustainable.

[normie]

How much you want to bet that developers are behind this? I'll bet they're drooling at the prospect of picking up properties for cheap when grandma can't pay or forgets or doesn't understand that she now has to pay this big bill.

[brooklynborndad]

Originally Posted by normie

How much you want to bet that developers are behind this? I'll bet they're drooling at the prospect of picking up properties for cheap when grandma can't pay or forgets or doesn't understand that she now has to pay this big bill.

Developers? In Loudoun? I don't think there is the market for buying SFHs and redeveloping them in many parts of Loudoun. I mean it would surprise me, at any rate. If elderly people sell cause their taxes have gone up the buyers are likely to be the same kinds of folks who buy homes in Loudoun anyway, I would think.

Oh, and if someone does not pay their taxes, IIUC the county would foreclose on the house. And I presume the county sells at market rates, when it sells a house taken for taxes, so developers wouldnt get anything "cheap" that way.

[CAVA1990]

Originally Posted by brooklynborndad

I thought the reason for property tax breaks for the elderly was to keep lower income elderly owners from being forced out by rising assesments caused by rising property values - I believe thats called a circuit breaker. The law in Loudoun appears different from that. Without knowing what the goal of the program is, and not being a citizen of Loudoun County, I do not feel in a position to criticize it.

Perhaps we could achieve that objective while recouping the revenue by deferring property taxes on seniors until their homes are sold or passed on to heirs.

[car54]

Originally Posted by CAVA1990

Perhaps we could achieve that objective while recouping the revenue by deferring property taxes on seniors until their homes are sold or passed on to heirs.

Precisely what I was going to say...