Increase in East Valley housing prices lead to higher property taxes.
This isn't really news to anyone, by now. Or, at least, it shouldn't be. But it is rather rattling to homeowners who've seen their property taxes increase dramatically in the past two years, and the reaction is driving a passion among homeowners for property tax reform.
Thus, the Ahwatukee Foothills News, which sadly doesn't have permalinks, features a front page article by Doug Murphy:
Thus, the Ahwatukee Foothills News, which sadly doesn't have permalinks, features a front page article by Doug Murphy:
Home value increases leave many shakenMy own home value increased about 60% in the past 18 months. Which is great if you're planing to sell. But if you're planning on staying where you are (as I am) then the real difference it means in your life is more turnover in neighbors and more taxes to pay. Sigh.
The sudden jump in assessed value of Maricopa County homes is still causing some homeowners to reel from what they anticipate will be a huge jump in next year’s property tax bill.
...The increase in assessed value was due to a red-hot real estate market, and didn’t surprise some people. “Mine went up 68 percent and I expected something like that,” said John McComish. “When you look at the value, and what houses were selling for in the neighborhood, I wasn’t surprised,” said McComish, who is one of two elected state representatives from Ahwatukee Foothills [NB: in District 20] and president of the Ahwatukee Foothills Chamber of Commerce.
...Expected or not the sudden jump from last year to now was due to a change in how the Maricopa County Assessor’s office updated property values. “My predecessor (Kevin Ross) had residential and vacant land appraisals on a two-year cycle, so the last time those properties were looked at was well over two years ago,” said Keith Russell, the Maricopa assessor. “What you end up with is 24 months of appreciation at one time.” And during those 24 months the Maricopa County real estate market has been rising like a Titan rocket. Russell said even his home valued jumped 60 percent.
...Meanwhile, lawmakers have taken notice of the increase in assessed value, said McComish. “That’s why we’re working on property tax reduction and property tax reform.”
posted by Geo at 1:26 PM
2 Comments:
Actually, my views on this are difficult to summarize in a short response. But I'd say that it boils down to the Biblical principle of sound stewardship.
The way I see that manifesting in this case is in a few ways:
1) I am generally in favor of lower taxes combined with wiser spending.
2) I also realize that some things are legitimate expenditures by the municipality and that money has to come from somewhere.
Holding these two concepts in tension, my first instinct is to prioritize spending so that we reduce waste and increase efficiency in how we use our revenues.
In my own life, I tend to be pretty frugal and make it a point to save money and spend it wisely. But there are some things I do not hesitate to spend money on, because I've learned that they are priorities worth the money. Quality toilet paper, for example. :)
My own sense, too, is that when politicians talk about reducing taxes and cutting spending, they usually do so as a knee-jerk reaction to some momentary stimulus. It's seldom a part of a diligent, well-thought-out process of prioritizing spending and eliminating waste.
So, when we have a real estate price boom, we get politicians who jump on the bandwagon of lowering property taxes, without actually doing the diligence of telling us where they are going to cut spending, economize, shift priorities or make up the revenue elsewhere. I find this kind of shallow, populist fiscal reactionism to be very frustrating.
To answer your question as concisely as possible, I think it might well be possible to reduce property taxes, but it would need to be done as part of an overall look at where we're spending our money and how else we get our revenue.
As far as that's concerned, there is one thing that could possibly be explored. Namely, rather than penalizing homeowners who KEEP their homes (and who are not profiting from the increase in value), perhaps there might be some way to defer taxation until someone actually SELLS their home and benefits from the huge increase in value.
As I say, I'm no fan of taxes and encourage reducing them wherever it makes sense. But I also appreciate that the city has legitimate expenses and the revenue has to come from somewhere. Business taxes, sales tax, property tax, income tax, use fees...a practical approach that considers them all, along with a sound and diligent effort to prioritize and reduce spending, where possible, would be great.
Just to expand on what I was talking about in terms of possible delayed property taxation, consider the possibility that your property tax is based on the valuation of your home when you bought it, and increases no more than the rate of inflation each year, thereafter.
Assmuing that house prices increased, this functional valuation would increase every year, as would your property taxes, but not as fast as a booming housing market would.
Then, when you sell your home, there could be some residual property tax based on the difference between that functional valuation and the actual price for which it sells.
That allows homeowners to pay a reasonable property tax, but doesn't penalize them for the increase in home valuation that occurs due to the fact that their neighbors have been selling their homes. Then, when one chooses to sell, it's financially a lot easier to bear the cost of some of those property taxes, since it's in the context of income coming from the house sale.
Another benefit to this is that the downside risk is eliminated. If the housing market doesn't perform well and values increase at or less than the rate of inflation, then when the house is sold, there is no additional property tax to pay (as it will have already been paid based on a functional valuation that is in line with the market.
This is just an idea. I'm sure there are flaws with it, and there are tons of other ways this could work. And it would need to be done in the context, as I say, of a broader look at revenue enhancement and spending prioritization. But, for what it's worth, I'll throw the idea on the pile with the rest of 'em. :)
Post a Comment
<< Home