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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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OT - Florida's Property Taxes Go Wacky in Housing Slump
FYI...
This may give an insight into what the future holds for us in California after Prop. 13 is modified. Your thoughts? TMT Monday, Jun. 29, 2009 Florida's Property Taxes Go Wacky in Housing Slump By Tim Padgett In Palm Beach County, Fla., buyers who find fire-sale bargains at foreclosed home auctions — picking up, say, $400,000 houses for $100,000 or less — are also realizing they're required in many cases to pay the same property taxes, as if the homes were still valued at $400,000. In Miami-Dade County to the south, where one in four homeowners are 30 days or more behind in their mortgage payments, residents are bracing for what Mayor Carlos Alvarez says could be an imminent property tax hike to fill an almost $400 million budget hole — a move that veteran Miami realtors like Alex Shay insist would set recovery back. "It's out of line," says Shay, who recently took Alvarez to task on his Miami Real Estate blog. "A lot of people here are barely holding on to their properties, using credit card advances to pay escrow, and the county wants them to take another hit?" (See pictures of Miami: Paradise Lost.) Welcome to Florida, the land of no income taxes — and killer property taxes. Whether it's a nightmare for someone who just purchased a Florida foreclosure, or a tax hike that proves the last straw for some struggling homeowner, it's bad news for the individual, and increasingly for the state. It's also a painful reminder of the halcyon days when Florida's economy could lazily rely on soaring real estate prices — and related taxes — to pour ever more money into government coffers. Now, local governments say they're broke, thanks to the housing bust, and many are trying to maintain the lofty property tax rates levied during the housing boom, or even increase them, — even though that could exacerbate the housing bust. Truth is, a dysfunctional property tax system has been haunting Florida, if not many other states, far longer than the recession has. Over the past generation, Florida's explosive but fecklessly managed growth drove up real estate values, and therefore property taxes, beyond the reach of more and more families. In the 1990s the state adopted a "homestead" measure which, when homeowners become eligible for it, caps their assessed property value increases at 3% a year (part-time residents don't qualify). But when houses are sold, a far higher base assessment usually applies, creating absurd situations in which neighbors with similar properties pay wildly disparate taxes. And during the boom, in expensive markets like South Florida, homeowners who had yet to qualify for the cap often saw their property levies double over just a few years — a big reason half of all South Floridians in a 2007 Zogby International poll said they were considering moving out of the state. (See pictures of Americans in their homes.) But lately the situation has gone from bad to, well, perverse. "One of the frustrating paradoxes of the recession is falling real estate markets and rising property taxes," says Kurt Wenner, research director at Florida Tax Watch in Tallahassee. A 2008 state reform, as well as another set to go into effect next year, have reduced some of Florida's property tax burden by making the cap more generous and accessible to more residents. But because of arcane provisions in the homestead law, government appraisers can tell a homeowner that although his house's current market value may be as depressed as a Florida sinkhole, its taxable value is still high or rising. More important, many of the state's county and local governments are raising their millage rates (the rate per thousand dollars of assessed value that determines the property tax bill) to make up for budget shortfalls. One element of confusion, if not contention, is the tax bill due on dramatically discounted homes bought at foreclosure auctions. Those purchases, which represent about 40% of new home purchases in Florida now, are driving any home-sale revival the U.S. is seeing (even if they also help drive down surrounding home prices). But in many if not most cases, people buying foreclosed homes have budgets "that can afford the taxes on a $100,000 house but not necessarily a $400,000 house," notes Brian Paul, CEO of the Realtors Association of the Palm Beaches. Of course, Palm Beach County executives take a different view. "Introducing foreclosure into the [property appraisal] equation may be an interesting idea," says John Thomas, director of residential appraisal at the Palm Beach County Appraiser's Office, but "people should remember that property assessments are made based on the surrounding neighborhood more than a specific house." Of course, homeowners can appeal to their county's value adjustment boards to negotiate lower assessments. And real estate experts like Paul say onerous tax bills aren't proving too large a hindrance to foreclosed-home purchases. The bigger concern is that during the boom, many local governments spent their revenue windfalls like sailors, which makes taxpayers less sympathetic to their budget whining. Mayor Alvarez insisted this month that "it's almost impossible that we can achieve an acceptable budget" without a property-tax increase. But because Miami-Dade residents saw so much official profligacy during the housing bubble — county commissioners were famous for having cops chauffeur them around town, costing hundreds of thousands of dollars in police overtime — Alvarez's suggestion is being met instead by calls to further streamline the county's bloated bureaucracy. |
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OT - Florida's Property Taxes Go Wacky in Housing Slump
Too_Many_Tools writes:
In Palm Beach County, Fla., As a Palm Beach County resident and homeowner/homesteader, I can testify that this article doesn't even count some of the most irrational factors. (1) Property taxes in Florida are paid in arrears. This means the assessments during a market crash are still based on market bubble conditions. You are in effect taxed for hypothetical property value that you never realized and which no longer exists even hypothetically. (2) Assessments are based not on the value of the property as much as on the history of ownership ("Save Our Homes" 3 percent/year increase limit) and a long-passed hypothetical/unrealized bubble value. Prices crashed to 0.4X their bubble peak, yet assessments do not follow, even when an actual sale realizes the true market value, because then the whole neighborhood of comparable properties would likewise have to be reassessed to reflect the truth. So this fantasy value is perpetuated statewide, because truth would shift the property tax burdens around, and shifting is the least politically desirable thing. Assessments are systemically unsound, and there is no system reset button. Assessments have always been criticized for being noisy, but this is an entirely different class of madness, with arbitrary winners and losers, and consequent contempt for taxation and politicians. It's like that experiment where they give 10 IRS agents the same tax situation and they come up with 10 different answers, but far, far worse. The same properties on the same block vary as much as 3:1 in taxes. (3) Most of the property tax goes to the teachers union, and politically there is no way they will allow anything but a nominal budget cut. |
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OT - Florida's Property Taxes Go Wacky in Housing Slump
On Jun 30, 5:17*pm, Richard J Kinch wrote:
Too_Many_Tools writes: In Palm Beach County, Fla., As a Palm Beach County resident and homeowner/homesteader, I can testify that this article doesn't even count some of the most irrational factors. (1) Property taxes in Florida are paid in arrears. *This means the assessments during a market crash are still based on market bubble conditions. *You are in effect taxed for hypothetical property value that you never realized and which no longer exists even hypothetically. (2) Assessments are based not on the value of the property as much as on the history of ownership ("Save Our Homes" 3 percent/year increase limit) and a long-passed hypothetical/unrealized bubble value. *Prices crashed to 0.4X their bubble peak, yet assessments do not follow, even when an actual sale realizes the true market value, because then the whole neighborhood of comparable properties would likewise have to be reassessed to reflect the truth. *So this fantasy value is perpetuated statewide, because truth would shift the property tax burdens around, and shifting is the least politically desirable thing. *Assessments are systemically unsound, and there is no system reset button. *Assessments have always been criticized for being noisy, but this is an entirely different class of madness, with arbitrary winners and losers, and consequent contempt for taxation and politicians. *It's like that experiment where they give 10 IRS agents the same tax situation and they come up with 10 different answers, but far, far worse. *The same properties on the same block vary as much as 3:1 in taxes. (3) Most of the property tax goes to the teachers union, and politically there is no way they will allow anything but a nominal budget cut. I think you will find this article of interest. TMT Saturday, Jan. 10, 2009 Why Does Your Devalued Home Have Such a High Tax Rate? By Paige Bowers / Atlanta Are your property taxes rising while the value of your house falls? Join the multitudes of Americans who are in the same predicament. In Atlanta, home values have tumbled over the past year by as much as 12%, but an Atlanta Neighborhood Development Partnership study of high- foreclosure areas found that the owners of those properties would have had to pay an extra $70 million in taxes because of overvalued but official appraisals. In states from New York to Arizona, angry citizen groups are lobbying their state legislatures — which are already facing budget shortfalls — to address the discrepancies. Tax assessors across the country have seen an uptick in the number of homeowners challenging their homes' appraisal value. The Wall Street Journal reported that in St. Tammany Parish, La., 15,000 residents — instead of the usual 500 — requested a review of their 2008 tax bills. And the Cleveland Plain Dealer reported that Cuyahoga County, which has about 1,300 foreclosures a month, saw three times as many appeals in 2007 compared with previous tax cycles. Atlanta attorney Edward Lindsey says he saw the writing on the wall when he first ran for state representative in 2004. As he went door-to- door canvassing for votes in one of the city's wealthier enclaves, countless residents told him of paying property taxes that didn't reflect the true value of their house, but a value fueled by an assessment of their neighbor's recent renovation. Lindsey may have felt a little guilty. He and his wife had just completed what he described as "an upgrade" — he tore down one house and replaced it with a larger one — to the property they had lived on for the past 20 years. "It's not fair for [my neighbors] to have their property reassessed because of the renovations we've done," says Lindsey, a Republican legislator since 2005. "Property taxes should be focused on what you invested in the property rather than the unrealized gain, which is subject to wild variations." Lindsey is one of several Georgia state lawmakers currently calling for property tax reform. It's a mission fueled by head-scratching homeowners who can't fathom why they are paying higher taxes on homes with tumbling prices. However, with at least 44 states facing budget woes in the coming year, it's a movement that, if successful, could make it tougher on states to raise revenues. And yet, with the Georgia general assembly about to start its session next week, Lindsey says he hopes both houses will quickly pass his bill to cap growth in assessments at 3%. But state senator Vincent D. Fort, a Democrat, believes that in an era of state budget cuts, this is an issue best left to municipal governments. "Municipalities know best what revenues are needed and how they are needed," Fort told TIME. "Those officials, those school boards, those city councils are going to be held accountable by their constituents and [these caps aren't] helpful when state cuts are requiring cities to look at how to raise revenues. Localities need to be able to control their own property tax." Lindsey, meanwhile, argues that property taxes are a "backdoor tax." "I believe local officials should go to your front door to tell you they need to raise taxes," he says. "There are times when constituents will understand that they need [higher taxes] for better services, and they will adjust." Already, the push-and-pull of falling revenue based on property taxes, on the one hand, and demand for services, on the other, is convulsing many communities and states. In Decatur, Ga., a suburb east of Atlanta that relies on property taxes for revenue, the city has postponed a vote to annex additional neighborhoods because locals are concerned that annexation will overcrowd schools. In New Jersey, Governor Jon Corzine wants county and municipal governments to forego more than $500 million in pension payments in the coming year as a way of avoiding higher property taxes. And California and Arizona, where property values have tumbled as much as 30%, are faced with borrowing billions of dollars to cure their ailing budgets. "It's not just a problem for folks here," Lindsey says. "It's a problem for folks everywhere." |
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