No. Property taxes are based on the value of the property as calculated by the tax assessor:
This value may change as the housing market rises, or improvements are made to the property.
Better idea, why don’t you read a basic economics textbook? Really, this one is covered in Microecon 101. You may want to change the way econ works so that elderly neighbors on a fixed budget “feel better” - but as long as we are changing reality, I’d think my elderly neighbors would feel better if we took away their age related aches and pains.
Well, son of a bitch. What the hell am I thinking of then? I could have sworn I’ve heard of what I’m talking about before. Maybe I imagined it.
Diosa, as provided by Proposition 13, any increase in the assessed value of the property for property tax purposes is limited to a very small percentage per year. It could be 2 or 2.5%; I’m not really sure.
Of course it’s a shell game, all of politics is. I don’t use ANY of the county, state, local or school resources I pay for, but yet, every six months comes that bill from the county of Cook. The largest unified court system in the world, second largest sheriffs department in the United States, all of which I pay my part of. I don’t use the sheriff, I have no kids to put in schools, no court cases to settle, I use the roads but my gas is taxed for that, the fire department has never been to my house, but I pay those taxes so everything keeps working that needs to. It doesn’t matter what you use, or what you pay, either you can afford it or you can’t, either you pay or you don’t. It’s simple; things need to happen, people need to pay for them to continue to happen, and it’s sad, sure, but if the lady in the OP can’t afford to live there, then there’s probably a county program to help her move and or sell.
No retired person should be evicted from their outright owned home for lack of paying property taxes. If the retired home owner needs to go into arrears, the municipality can put a lien on the house till the owner voluntarily sells or upon disposal of the estate.
However if the retired homeowner elects to contract for a reverse mortgage, and then fall into arrears, then the financial institution has to protect their investment and the homeowner should forfeit their “right”. After all they would not exactly be the outright home owner.
No retired person should be evicted from their outright owned home for lack of paying property taxes. If the retired home owner needs to go into arrears, the municipality can put a lien on the house till the owner voluntarily sells or upon disposal of the estate.
However if the retired homeowner elects to contract for a reverse mortgage, and then fall into arrears, then the financial institution has to protect their investment and the homeowner should forfeit their “right”. After all they would not exactly be the outright home owner.
Actually, during the expansion period of the housing bubble, assessments are likely to lag behind actual proces, because some places only assess property every two years, or sometimes even every five years. So, it’s feasible that, during a bubble, your house might rise in actual value (i.e., what someone will pay to buy it) from $100,000 to $180,000 (not unusual here in Baltimore during the bubble), but you’re still paying taxes on a value of $100,000.
Your taxes are most likely to be too high (compared to the value of your house) AFTER the bubble bursts. Because by then, your city has probably gotten around to re-assessing your value based on the climbing prices during the bubble, but then the bubble bursts and your house is worth less than its assessed value.
Actually, assessments can go down, but (depending on where you live) it sometimes requires making a specific request for a re-assessment.
The New York Times recently had an article* on the subject:
As the article points out, local governments often see large increases in income during housing bubbles, and when the bubble bursts and everyone wants re-assessments done, these same local government have to find money from somewhere else or begin to cut service.
Of course, during the boom times most local governments just spend the money as if the good times will never end. Very few of them put some aside for the lean times.
- I’m a Times Select subscriber. I’m not sure if non-subscribers will still be able to read the whole article.
I already mentioned this, but obviously not everyone got it - In MOST property tax regimes, including AFAICT the one mentioned in the article, rising real estate values have nothing directly to do with the absolute value of property taxes. The absolute value of property taxes is determined by the elected body that made up the municipal budget. This is distinct from the property ASSESSOR, whose role is to determine the market values of property in order to allocate the tax burden on that basis. It’s done that way to address this very concern - that real estate bubbles result in unreasonable tax assessments and some kind of windfall for the local government, and from what I’ve seen, it works quite well. Maybe this isn’t the case in California/Freakydeakysexland.
Or worse, they spend money on things and programs that have recurring maintenance costs or continuing budget impact and when the lean times come (or even when the growth doesn’t continue at the projected rate), they’re faced with budget reality. That’s when the “think about the poor cops and teachers” line comes out.
For a cite, I can direct you all to a roller hockey park that sits unused with the lights shining brightly night after night.
We’re going to see an interesting experiment in the next few years in some areas of Texas where there has been a natural gas drilling boom. A producing mineral lease is a taxable property. Some school districts and counties will see a major windfall in the next few years. It will be interesting to see how much of that money finds its way into teachers pockets and how much is used to build new football stadiums.
It would be heartening to see the school districts invest in infrastructure in a way that would help control their operating costs for the next 20-30 years when the boom dies down.
Dangerosa, I apologize for the snipe. This is a hot-button issue for me because of the antics of my local government. I’ve asked for explanations from them when they are campaigning for re-election and I get what amounts to “It’s too complicated for you to understand” in a condecending tone.
My town has no residential property tax. Zero, zip, none. Yet we have roads and sewers and police, etc. Even then, our town govt has enough cash to spend on such frivolities as movies in the park, and even paver bricks in the town center to commerate the villages trustees themselves. And for this seniors (or anybody else) should pay $12,000/yr in property taxes? NO.
In my case, my local, Democrat-controlled government lowered the tax rate to keep taxes down when the prices were skyrocketing. Across the board, so we don’t have neighbors with disparate tax rates (oh, except they give breaks to seniors/low-income folks).
Serious question: how does your municipality pay for it’s infrastructure and services?
What town do you live in?
Toon, one suspects.
Sorry, I was unclear. The proposed plan wasn’t “when you sell, you have to accept that price”, It was “If someone produces the money, you are required to sell to them at that time.” I’m assuming that there was some reasonable period for moving out, etc., but it wasn’t explicitly stated.
From the New Resident Packet, available on the web site of the Village of Carol Stream:
(quoted text taken from thispdf)
So no, there’s no property tax. However, there are additional taxes on other services (phone, electric, gas), as well as a property transfer tax during sale. In addition to those fees, the village is making up the shortfall by charging residents other fees to make up the difference. I’d bet my ass that those inspection and licensing fees are higher than the nationwide average.
Those services are funded, and paid for by the village residents. Except for the ones paid for by grants - presumably, we’re all on the hook for those.
I see that the Village of Carol Stream’s number one revenue source is shared state sales tax.
That simply means that there is an emphasis on a tax on consumption rather than an emphasis on a tax on assets. In other words, good for the asset rich at the expense of folks who have to spend what they earn.
All in all, however, I like it.
No – it is a real place.
Actually, you had the option of either selling at your self assessed value, or to immediately raise your assessed valuation high enough to discourage the buyer and pay for five years (I think that was the term) of the difference in taxes between the two values.
I suppose that there would be few forced sales of fairly valued properties–unless somebody really craved your view or something else of that nature. I could see this as a viable scheme if only underassessed houses were subject to this sort of forced sale–it would be a real bitch to have to pay to stay in your house just because somebody else really likes that style of architecture and has more money than you.