2-7-12: Your Neighbor’s Taxes

February 7, 2012 at 8:10 am 1 comment

You may recall property taxes dominating the campaign for mayor of Baltimore this past summer–how to cut property taxes, how much, how to make up for the revenue that would be lost.

Baltimore Sun reporters Scott Calvert and Jamie Smith Hopkins have gone deep below the talk with an investigative series about property taxes. Turns out they’re more of a burden on some city residents than they are on others.

One reason for the disparity is the Homestead Tax Credit. It’s a cap on the percentage increase on your property taxes. So if the assessed value of your home spikes, as it did for many before the crash, the property taxes won’t spike with it.

Sounds good, and the system does have its upsides. But it comes with a lot of inequities, as well as opportunities for fraud, all of which keep potential revenue out of the city’s coffers.  Jamie Smith Hopkins and Scott Calvert tell Sheilah why that is, and what reforms lawmakers are proposing.

Friday is the deadline to challenge your home assessment, at least for the one-third of Maryland homeowners who received their assessment values on December 27. Here you can find a form you can use to appeal your assessment. And here you can find assessments for properties in Maryland.

Web extras:

Scott and Jamie talk about the process of analyzing the data behind their investigative series: Scott and Jamie discuss citizen input to their series: Scott discusses the shortage of assessors in the state:

Entry filed under: Annapolis, On Air, Policy. Tags: , , , , .

2-7-12: A Would-Be American Emperor 2-8-12: Governor Martin O’Malley

1 Comment Add your own

  • 1. jack facts  |  February 7, 2012 at 11:28 am

    I am glad you touched on the point that our well-paid public servants couldn’t figure this out. Surely some heads should roll – but won’t since incompetence is tolerated. It is unfortunate that neither on air or in web extras was there any effort to explain the wisdom of the homestead credit, i.e., why it was created and should be continued. New home buyers can chose their purchase based on their income vs. all the costs including property taxes , whereas the longer it has been since purchase, the more chance that there is a disparity between costs and the owner’s income. Besides, we all accept the wisdom of not being taxed on the appreciated value of stock that has not been sold (just ask those whose 401k’s had zoomed upwards but became 201’s in 2008-9 or 101’s in 2000-2); why should one’s home be any different? Further, homestead credit encourages owners to remain where they are, thereby strenghtening neighborhoods, a “public good.” If newer owners subsidize some share of taxes attributable to their neighbors, that extra cost will become reflected in a downward adjustment in home values/prices so that all-in carrying costs (mortgage and taxes) are equalized (if there were 2 identical properties for sale except that taxes are (AND WILL CONTINUE TO BE) 10% more on the 2nd one, wouldn’t you pay a little less for it than for the other?). So rather than whine about paying more taxes, newer owners should realize they paid less for their home than otherwise would have been the case. It’s a win-win.

    Reply

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