A reversal in property taxes?

Posted by: Dean Foust on June 21, 2007

taxhike.jpgEvery spring over the past four or five years, I’d get a letter from the treasurer of the county I live in (Dekalb) that started out, “Congratulations! Home values continue to rise in Dekalb County!” And then a few paragraphs later, he’d bury the lead: The county was raising the assessment on my house.

In fact, in the eight years since I moved from Washington to Atlanta, my property taxes had more than doubled. The CEO of our county never had the guts to raise taxes outright, but hid behind rising property values (in fact, each spring he would lower the millage rate by some minute amount and then crow about how he had cut taxes! A claim that was lost, of course, on those of us who saw our taxes go up by $500 to $1000 each year.)

The kicker: When our state house member succeeded in passing a law in the Georgia Legislature that would freeze assessments in Dekalb County for five years, the county went on an aggressive push to raise assessments last year right before the freeze took effect. I don’t think it was a coincidence.

crist.jpgSo I notice with interest that Florida Governor Charlie Crist just signed a bill to lower property taxes by a collective $16 billion. Critics say it works out to pocket change for most homeowners, but I say it’s a step in the right direction. I’m also curious whether local governments around the country will LOWER assessment in areas where property values are declining. I think we all know the answer to that.

The Tax Foundation produced a nifty chart comparing the recent increases in property taxes versus increases in incomes. Here are the numbers. The numbers here are annual changes in property tax growth, and then annual changes in personal income growth for each of the fiscal years shown:

Year Personal Income Property Taxes

1990.......6.78%............9.28%
1991.......4.94...............7.96
1992.......4.61...............7.34
1993.......5.32...............5.22
1994.......4.16...............3.90
1995.......5.86%............3.20%
1996.......4.99...............2.94
1997.......6.18...............4.48
1998.......6.81...............5.17
1999.......6.27...............4.14
2000.......6.61%............3.97%
2001.......6.22...............5.82
2002.......2.02...............5.88
2003.......2.19...............6.27
2004.......4.66...............7.27

You can find the Tax Foundation's full report on the rise in property taxes by clicking here.

 

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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