Why are so many homeowners faced with house prices down, why are tax assessments up?

The answer is that there are NO spending caps  in most locals.  Government spending is rarely tied to an index and thereby control  vanishes.

Each year, individual taxing districts — including counties, cities, and school, fire and library districts — decide how much money they need and then send that total to the assessor, who sets whatever rate is needed to collect these funds  based on the total valuation of the various tax district

So, if property values go down and the spending needs increase, tax rates go up. Conversely, if property values go up by more than the increase in the set total, tax rates decrease.

Property Tax Tips

Look at your assessments. Property owners can appeal their property taxes within the timeframe allowed on their assessment notices, typically  within 30 to 60 days.

Ask questions. Get a good guidebook and don’t fear the appeal. Many don’t’ know they are eligible for tax breaks and deferrals. Learn to pay  your fair share.

Question: I just purchased your Property Tax Appeal guide.  I have only a few days left to file an appeal - but I need advice before filing — I’m in Howard County Maryland — I’m given three options for appeal  1) "Written instead of personal Hearing"  2) Personal hearing with an assessor or 3) Telephone Hearing.  Which choice would you recommend I take?  If I take the written - how much information should I include?

Answer:  I would pay the filing fee for review appeal with the PROPERTY TAX ASSESSMENT APPEAL BOARD
contact: Howard County Clerk to the Appeals Board, 410-480-7965
http://www.co.ho.md.us/PortalServices/HC_bc_property.htm
 
This way you’re covered.
 
Then I would work up your comparables and call the local tax assessor and discuss your findings. If not satisfied you’ll be able to state your case to the appeal board. If you are not satisfied with their answer you can appeal to the tax court.
 
You need to file an appeal with the appeal board. When you fill out the form likely you will not have to present all the evidence. The filed form is your official foot in the door. Do not miss the file appeal date for offically filing your from with appeal board otherwise you’ll have to wait another year.
 
Sometimes the tax assessor will even contact you in order to work out a deal to avoid the appeal board hearing. Call and ask how many days before my scheduled hearing do I need to make my written evidence available to the members of the board? How many copies should I prepare?

Property taxes seem to keep increasing despite all the rhetoric for budget cutting. Substantive local budget cutting issues never seem to make it on the ballot, at least not in my Township. In my opinion there should be a good 10 cost cutting initiatives on the ballot each election.

Nevertheless, declining property values equals a higher tax rate. With the credit crunch and the declining tax base of lower priced homes, homeowners will have to fork over a larger portion to the taxman.

Still you have a good chance to win a tax appeal. It should be easy to find less expensive comparables of sold homes to make your case.

With the massive tax increases that are in store, the amount of winnings on appeal will be larger … and with a win the new derived assessment will roll over and result in future years of tax savings.

It’s unanimous, higher taxes are the result of high levels of spending. The power of the ballot is dead when meaningful tax cutting and budget cutting measures are suppressed and not listed on ballots. The taxpayer consensus of opinion is left out of the equation and it’s business as usual in most American towns.

As a U.S. senator quipped, “The marvel of all history is the patience with which men and women submit to burdens unnecessarily laid upon them by their governments.”

The slowdown in residential construction means fewer homes will be added to the tax role. Budget pressures are bringing higher taxes much to the consternation for the homeowner. Homeowners wonder how can their taxes increase when their home values are go down.

There is no tax revolt because there is NO POWER in the ballot box. Many find it outrageous that voters don’t get to vote out budget increases and government union excesses.

 An interesting editorial coming out of Roanoke VA  pointed out that property taxes are an antiquity that belong in a museum. The article pointed out that property taxes made sense when only the wealthy owned taxable houses, but now with widespread homeownership, it should be abolished.

As historian John Steele Gordan said in a 2006 commentary on Marketplace, the property tax is "a relic of the colonial past and should be abolished." He said it should be displayed in the Smithsonian "along with other relics like chamber pots and clay pipes." http://www.roanoke.com/editorials/wb/157290

Property taxes, the article argues, bears o relation to the taxpayer’s ability to pay. The working poor are often imprisoned by arbitrary high property assessments. Minimum wage homeowners have little resources, time or means to fight the system. Budget increases and tax hikes unfortunately increase the burden on the already poor.

The alternative would be a state tax. It would be simple and fair. The local tax departments could be fired. Expensive blanket assessments would be abolished saving millions of wasted dollars.

Have you noticed a gallon of milk is up nearly 20 percent than a year ago? Bread is more expensive to say nothing of heating and fuel costs.

Is it recession or inflation? In a recession people shut their wallets and worry about losing their jobs. In inflation, the price of everything goes up but you still have a job.

A quip from Mellon economist Allan Meltzer put it this way, “Capitalism without failure is like religion without sin.  It doesn’t work.”  

In the political world, no one is taking the side of the taxpayer, so it seems. No one is working against the lobbyist influence that pedals deals in Washington, who sell your inheritances of stability and honest dealings for a percentage. They are responsible for giving corporations billions in tax cuts when they outsource jobs all the while selling often inflated insider deals to political representatives.

Some of the inflationary forces at work are high ethanol subsidized energy prices, the tax cuts for multinationals outsourcing and exporting jobs overseas and bailouts of financial institutions associated with the real estate market.

They are talking about a bailout for foreclosed homeowners with a program  that would create "negative equity certificates."  I bet the taxpayers are just jumping up and down in terror while the mortgage companies roll in laughter with the promise of government guarantees.

Inflation may be dampened by small recession in the short run … if that is in the cards. But, long run, it looks like business as usual. None of the political parties want to cut expenses and clean up the landscape.

With home prices declining, the property tax bite is not going to decrease. If anything, it will increase do to the nature of government. At lease here in New Jersey, government has insulated itself in archaic unionism and privilege coupled with impulse spending with little to no oversight.  State business buy favorable treatment for new spending  from politicians using campaign contributions.

Many authorities tell us that there are 40 to 60 percent chance of error in our property tax assessments. That may inspire some to appeal their residential property taxes.

Before you appeal you property taxes, pull up and arm yourself with information about sales prices of similar homes, homes that look like yours and are in the same general neighborhood. Use an assessment worksheet in order to make adjustment plus or minus for amenities that comparable properties have or lack when compared to your home.

If you do it yourself you get a free assessment worksheet and professional advice and hands on training making your appeal using the manual provided from http://www.propertytaxax.com

The only other choice is to wing it or pay over $1,000 for an appraiser and lawyer to represent you.

The tax assessor staff uses their own data to build their case. You can hire an appraiser for an market analysis and usually he has to be present at a municipal hearing. It can be expensive. Some recommend a Realtor for a market analysis but this usually gets shot down at the hearing since little back up material is presented and itemized adjustments are not focused on as points of contention. My experience is that the Realtor is looked at as a second class professional when it comes to trusting his valuation opinion.

The cost effective method is to do your own appeal. When you win your property tax appeal you get a reduction in valuation from the board of equalization and get your tax bill adjusted or get a refund of taxes previously paid.

Overall property taxes seem to be increasing  while property values are decreasing and unless the local municipal government and state government economize, taxes will simply increase. Unless there emerge a groundswell of public protest and spending caps on the ballot, spend and tax are the operable engine. Unless there is a percentage cap on spending at every level of government, it’s like giving your teenage son or daughter a credit card and letting them do with it as they will.