Foreclosure Crisis has Not Reduced Property Tax Bills
Foreclosure crisis has not reduced property tax bills. One of the many who were angry was Javier Hyland of Miami Dade County after receiving property tax bill. The county estimated the value of his apartment with an ocean view at $417,000. But he cannot fathom the house to be evaluated at anything above $400,000 after the foreclosure mayhem in South Florida housing market. To make matters worse his neighbour’s house that was much more spacious and fancy at a mere $407,000. Hyland does not think it is fair.
The disputed tax amounts to $360. But Hyland is pushing through his assessment case in any case even though it will entail his winding his way through the offices of the city. The homeowners are saying that the taxes are not in proportion to the collapse in the real estate market – the worst since the 30’s.
The homeowners are not wrong. Despite the housing bust the property taxes levied by the states and the local governments increased by 2.7% in 2009 calculating to $421.8 billion as per the findings of Bureau of Economic Analysis. Revenue from property has been the lifeline of the troubled local governments. 96% of their income is from property taxes.
The trouble is that that the taxes on properties are calculated on market prices of long ago. In some areas the tax slabs are automatically adjusted so that the revenue collection does not suffer. In other instances the taxes are increased to make up for the budget gaps. The instance of Gwinnett County can be cited as an example. There was a fast growth of population in the suburban regions and property tax was increased by 21%. Thus many of the house owners in the county have seen their taxes increase although the value of their houses has fallen.
Scott Johnson of Atlanta’s Gwinnett County said that the tax bill on his house shot up by 15% in the previous year while the market value of the property went down. He said, “Is it any wonder people are getting mad? I am going to try to appeal but don’t expect much luck.” It is apprehended that there will be 10,000 appeals against high taxes this year in Gwinnett County said Steve Pruitt the assessor of the county.
In the majority of the states a limit has been placed on spiking of house taxes in an upbeat market. This maintains the tax at a rate below the market worth of the property. In many instances the gap continues even after the value has fallen and the boom is over.