Property Taxes Rising Nationwide
While the citizens of America were worrying about the war in Iraq, the increasing gas prices and the desperate state of our social security, the property taxes crept up behind us and caught nearly everyone by surprise. Middle-class Americans and senior citizens are suffering the most from rising property taxes, but before long all of America will have this problem.
The subprime meltdown has been blamed for the majority of the recent real estate foreclosures across America, but in reality, many home owners simply can’t afford their property taxes.
“My husband and I have had to give up eating out and going to movies just to save for taxes,” says Margaret Cullen, an orthodontist in Houston, Texas. “We’ve been working hard for the last twenty years just to have to cut back on spending again.”
Mrs. Cullen’s reaction is not unique, however, as many Americans are discovering that property taxes will continue to rise over the next decade. There are several lobbyist groups, particularly in New York and California, that are fighting for tax reform, but it doesn’t seem to be making much of a dent.
In fact, many current home owners are opting to sell in favor of renting apartments and homes in urban and suburban areas. In years’ past, renting was considered “throwing money away” since no equity was built in the transaction, but property taxes have made renting a viable and often attractive option.
According to ReMax, a popular real estate company, more apartment complexes are being built across America than ever before. Just this year, property taxes in some areas have risen as much as 25%, and many home owners have seen increases of more than 50% over the last five years.
Senior citizens are at a particular disadvantage because they live on a fixed income. When you don’t have a way to make extra money, property taxes can become a hindrance to surviving on retirement accounts and social security. Craig and Aleisha Fairchild of Lexington, SC have decided to put off retirement for another five years. “At sixty-five, it just isn’t in the cards. We pay more than $4,500 a year in property taxes now.”
Ex-urbanization is seen as the major cause for rising property taxes. As middle-class Americans move out of the cities and into the surrounding suburban areas, those less-affluent communities have to find new ways to educate children, build roads and attract new businesses. Increasing property taxes seems to be the only method they can come up with.
Another common cause of this problem is the rising property values in many communities. If properties are assessed for value on an annual basis, property taxes rise accordingly, and even though home owners are happy with increased equity, they have trouble paying their taxes. If this is the case for your home or property, you might want to bring in an independent real estate inspector to valuate the need for repairs. Some home owners have brought the prices of their homes down by $50,000+ by rejecting the values of their homes.
“If your home is valued too high, your property taxes will be proportionally large,” says real estate agent Mark Fields. “Insist that your property be valued correctly in order to determine your taxes, which should mitigate some of the damage.”
This is the same thing you would do if you wanted to sell your home; you wouldn’t have much luck finding a buyer if you need a new roof but you haven’t factored that maintenance into the selling price. Property taxes can come down if you are willing to put in the research and leg work.