Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I live in Texas now, where we have a tax break on a portion of our property tax. I lived in CA for 25 years and AZ for almost 4 years, where that is not an option.
States probably vary. In Maryland all property is reassessed every third year (1/3 of the State is done each year). Owner occupied residential is subject to a State limited increase in taxes of 10%/year, no matter the increase in assessment over 10% (some localities have set the increase lower). It's called the Homestead Exemption.
Rentals are not Homestead exempted so the tax increase each year over the three year cycle is whatever the assessment increase is (let's say it's 20% each of the three. The taxes will go up 20% each year unless there's a rate cut).
Also, Maryland has what's called the Constant Yield Rate. That means that if there are assessment increases the tax rate for next year drops back to yield the same revenues as this year. To raise that rate requires a public hearing separate from the required budget public hearing.
I live in Texas now, where we have a tax break on a portion of our property tax. I lived in CA for 25 years and AZ for almost 4 years, where that is not an option.
several years ago I did my own limited online research, looking at various states individually, and came up with an estimate that rentals are taxed at higher rates than owner-occupied homes in about half the states.
more recently i came across a claim that rentals are taxed at higher rates in 36 states, although the states were not enumerated and i didn't save the cite.
CA does have uniform property taxation (there is a minimal homestead exemption, much smaller than in most states) but there have been efforts in recent years to create a "split roll" property tax structure because many commercial property owners have placed their properties in corporate ownership in order to permanently enjoy Prop 13 protection.
e.g. owner A sells commercial prop to buyer B, property is reassessed resulting in big tax jump.
to take advantage of prop 13, owner A places property in separate corporate structure and sells the corporate stock (and control of property) to buyer B, resulting in NO reassessment and continued Prop 13 protection.
public worker unions and some homeowners think this is unfair and they want a higher tax on commercial and rental property.
OP, unfortunately, you're on their radar and will probably have to sell.
***This is posted strictly for educational purposes. I'm not suggesting that anyone break city laws!***
There are a lot of illegal rentals around. They fly under the radar by people telling lies:
1. The residents say they are all related (even if they aren't).
2. The residents work many different shifts so none of them are ever home at once.
3. Only the homeowner's name is on the mailbox and bills -- renters have mail service at Mail Boxes, ETC and use a former address, not the current rental. Ditto licenses -- they are not in the rental but a former address (or other residence).
4. The residents are perfectly quiet, do not drive trucks with noisy mufflers, litter, or otherwise call attention to themselves or the house. They do not lounge on the porch or in the yard.
5. The residents fit the neighborhood, white (if mostly a white neighborhood,etc). Their cars are not crappy and are kept clean.
6. The homeowner is either really surly so people mind their own business or really nice, taking around baked goods and helping with snow removal, etc. Both approaches work, but not at the same time.
The greatest danger is a PO'd neighbor who tattles to the City. This is more of a problem in some neighborhoods than in others. In my neighborhood, there are retired people who get bent if anyone parks in front of their house. If I were running an illegal rental (WHICH I'M NOT), I would make sure that no one ever parks in front of their house. It wouldn't matter how quiet you were, parking in "their spots" would anger them.
Petty, I know. But it's this sort of attention to detail that allows a lot of illegal rentals to exist.
So obviously zoning laws are perfectly legal, and of course you should have done your research before spending a quarter of a million dollars on something you couldn't afford.
However, I think you may have a shot here. I would call your local zoning and enforcement office ASAP and ask them to clarify the precise definition of a "transient boarder or roomer." If they define it the same as occupant or resident, then you are SOL. But the fact that the verbiage here specifically calls out the transient nature of the border or roomer, I think you may be able to be in compliance if you offer annual leases rather than renting by the day/week/month.
States probably vary. In Maryland all property is reassessed every third year (1/3 of the State is done each year). Owner occupied residential is subject to a State limited increase in taxes of 10%/year, no matter the increase in assessment over 10% (some localities have set the increase lower). It's called the Homestead Exemption.
Rentals are not Homestead exempted so the tax increase each year over the three year cycle is whatever the assessment increase is (let's say it's 20% each of the three. The taxes will go up 20% each year unless there's a rate cut).
Also, Maryland has what's called the Constant Yield Rate. That means that if there are assessment increases the tax rate for next year drops back to yield the same revenues as this year. To raise that rate requires a public hearing separate from the required budget public hearing.
A number of states have two-track tax protections which protect homeowners while soaking rentals and other non-homestead property. This has the effect of creating cumulative gulfs in tax rates.
michigan limits increases in 'taxable value' (TV) to 5 percent per year, even if actual assessment increases are larger. so "taxable value' tends to lag well behind assessed value.
michigan has a steep renewable "nonhomestead tax" (in addition to the base property tax) on rentals and other non-homesteads property.
and an additional tax limitation, the 1978 Headlee Amendment (which I voted for and later came to deeply regret my vote). this part if complicated, but the Headlee tax limit requires tax rates to be rolled back under certain conditions, with voters having the power to vote affirmatively to override the Headlee limit.
the part that drives me up the wall is - get this - since the nonhomestead tax always gets renewed with huge homeowner support, it is a no-brainer that whenever the Headlee tax cap applies to the nonhomestead tax,voters are ALWAYS asked to approve an override, and homeowners are always happy to deliver huge margine in favor of it.
at the same time homeowners are NEVER asked to override the Headlee limit on their own taxes.
So obviously zoning laws are perfectly legal, and of course you should have done your research before spending a quarter of a million dollars on something you couldn't afford.
However, I think you may have a shot here. I would call your local zoning and enforcement office ASAP and ask them to clarify the precise definition of a "transient boarder or roomer." If they define it the same as occupant or resident, then you are SOL. But the fact that the verbiage here specifically calls out the transient nature of the border or roomer, I think you may be able to be in compliance if you offer annual leases rather than renting by the day/week/month.
Are zoning laws perfectly moral? Is class warfare perfectly moral?
I would vigorously challenge any conflation of occupant/resident with "transient boarder or roomer". My average length of residence/occupancy is about five years, and that's not transient.
Are zoning laws perfectly moral? Is class warfare perfectly moral?
Yes, class warfare is both moral and ethical. It's not my fault people are poor or living in garbage. It's not my fault that they can;t get out of the ditch they are in. Truth be told, the problem is with our politicians who don't allow legal euthanasia or suicide. If it was legal, many of these useless people wouldn't see ending it all as a bad thing. As a matter of fact, I have no problem opening a Suicide Shack in the ghetto so people have a safe place to legally take their own life.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
