Details on Real Estate Assessments and the Property Tax
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32 responses to “Details on Real Estate Assessments and the Property Tax”
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Interesting commentary and ideas.
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This is GOOD! Very informative. I knew some of it but not all of it and you did a great job of educating!
Personal property, especially vehicles… any state rules on them?
Our county (Spotsylvania) uses NADA and the county policy seems to be to keep real estate taxes low but not so much on vehicles, especially late model and expensive ones where the tax on a late model car that cost 30K can be a thousand dollars a year. we pay as much for vehicles as we do for real estate with a 2021 and a 2017 vehicle.
So the county is basically targeting those who seem to have the income necessary to buy late model vehicles – my view. Vehicles are a proxy for income.
They also seem to utilize a private assessment firm – continuously and they are aggressive on the comps…. IMHO… they don’t use the median of the comps, they use the high end so a lot purchased for 25k is now said to be worth $125k – no water/sewer… well/drainfield. Seems outrageous to me but we got these costs for schools and public safety!
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Regarding the process of reassessing property values, reader Don Ruthig passes along a letter he wrote to the Accomack County Board of Supervisors. His gripe: The assessment on his property increased 26% while that of his next-door neighbor increased only 1%.
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I have had some success appealing those. Nelson County tried that BS on Wintergreen owners. Push ’em, Mr. Ruthig.
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Certainly Wintergreen property has far higher values than surrounding areas like Nellies Ford. I’m curious, were the assessment increases not related to sales prices?
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Dick, it would take one helluva income increase to cover the lost real property tax revenue. Not practical. And what about business taxes? Many of those are property based. About the only protection business has against a rapacious government is the mandate that the tax rates for business and residential properties (real or personal property) be the same. Eliminate the residential and car taxes and then the localities will greedily up the business rates. Nope. I’ll kill your bill in a New York Minute. Sorry.
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What’s offensive about the property assessments is that they increase dwelling values. This makes absolutely no sense. How does a structure go up in value? The materials are a depreciating asset. They decay over time (unless your house is made of precious metals).
The only thing that should be appreciating is the land, as it is a scarce resource.
I’m more bothered by the recent addition of a dining tax. It’s going to hurt my wife’s business as a wedding cake baker.
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Housing has been made a scarce resource by zoning laws through which those that have homes pull up the ladder.
It is a fact that a considerable part of the wealth that we boomers will pass to our heirs is residential real estate. Right now those who have it are feeling pretty good about themselves.
But in the famous water sport of greater fool, some people, as Warren Buffet once said, are swimming without a bathing suit.
With inflation and rising mortgage rates, the tide is indeed ebbing.
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That makes the land rare, not the dwelling. I live in Fauquier and we have these feudal landlords owning large tracts of land who have had very little impact from RE assessments. Total bullshit if you ask me. They don’t even USE the land. It just sits in conservation, horse pasture, or some other tax avoidance mechanism.
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I cannot disagree about the favoritism in the tax laws. Conservation easements and deductions/exclusions for non-working farms are the gifts the greens give themselves. Remember Alpaca farms for the wealthy in the 50’s?
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Improvements increase in value too if the land is appreciating. Location, location, location.
Funny how things differ, I live in a county that straddles I-95. For us a meals tax would come about 75% from transients off the highway. It would beat a property tax increase.
Curious that wedding cakes would qualify as dining, I’ll take a main course of bride, a side of cake and dessert of icing.
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Again logically I don’t see how a structure increases in value. The materials you used might cost more, but you can’t just disassemble a house and reuse the components. If location is everything then only the property value should go up, not the dwellings, yet this is what the statists due to bilk the middle class and preserve the wealth of the landlord class.
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Location determines value. That is both value of land and improvements. pretty simple really.
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Dick, it would take one helluva income increase to cover the lost real property tax revenue. Not practical. Lots of property owners now pay zero income tax. And what about business taxes? Many of those are property based. About the only protection business has against a rapacious government is the mandate that the tax rates for business and residential properties (real or personal property) be the same. Eliminate the residential and car taxes and then the localities will greedily up the business rates. Nope. I’ll kill your bill in a New York Minute. Sorry. 🙂 (Not really my job anymore, but in my previous life I’d kill it!)
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I would eliminate business property taxes as well . There are a lot nuances of which I am sure I am unaware. There would have to be a lot of number crunching,but I think, if the concept were accepted, a consensus could be reached on the details.
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HA! Good luck funding government during a recession, when all the businesses are reporting flat sales or losses, and their purchases (and thus sales and use taxes) plummet. Diversity of sources is the key.
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Thanks Dick. Valuable contribution.
My parallel suggestion was that local governments create plans for the real estate bubble bursting, which it always has under the rapid price accelerations we are seeing now – 20% in a year.
Zoning regulations have so crimped supply that the residential real estate market is unlikely to crash even in a recession. But it can certainly retrace the gains of the past decade.
Some Virginia jurisdictions have treated the surge in property tax money as if it was permanent. Same with the torrents of federal COVID funds. They have defined new “needs” and filled old ones without regard to the future sustainability of their current cash flows.
Residential real estate is right now a classic bubble. Muddling through might not be good enough. Thanks for this work.
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one way to look at local taxes is where the money is spent and who is it benefiting and who is paying.
From that perspective, a couple with a kid or two is not paying anywhere near the actual cost of educating their kid.
If it were not for schools, taxes would be about 1/2 what they are now or lower.
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We should tax cars at the same rate as real property, instead of 5x more for cars, in NoVA for example.
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it’s become a proxy for income.
If you have a late model car, you have good income!
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Not a good proxy , it distorts the car market, hurts sales of newer and greener cars, etc. And chases people out of Virginia. But nothing is wrong with a small local tax on cars, although I do no not prefer it.
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Can’t disagree.
one thing not really addressed in advocacy for a local income tax is whether or not it would work like Federal and State – i.e. “progressive”. Right now property tax is the same rate for all no matter income or wealth. Would an income tax be progressive?
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I have to jump in and throw salt on the wound. I have a 2020 Mercury Marquis with other 200,000 miles on it and a 2021 Ford F-150 with about 120,000 miles. Obviously, lousy gas mileage, but they are long paid off. Maintenance bills have not been exorbitant. I checked my recent personal property tax bill from Henrico–$0 owed on either vehicle!
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Well, just paying 1st half county taxes today and $1200 is owed for a 21 CRV, 17 Tacoma and 06 Ford van. The tax on the CRV is half year:
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You do not live in NoVA, but how do you get so many miles on a new vehicle? Instant depreciation case is odd case.
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Superior post. Home values have no current economic effect until the house is sold. Taxable income is a far better indicator of the ability to pay.
Lots of retirees move due to property taxes.-
And the recent budget says we will continue to be hard on retirees, except if you are in the military we will give some relief, apparently.
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Well the state gives each retiree a 12K deduction. That’s a LOT. A lot of retirees in Va get off easy.
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Also, Virginia does not tax Social Security benefits.
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I defer SS so not much help for me (yet). I’ll let you know if that helps in few years.
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I defer SS so not much help for me (yet). I’ll let you know if that helps in few years, assuming I am still here in Va.
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You mean lower income older folks can deduct that. Over about $90K for married/joint it phases out. I always said we are *extremely* tax friendly for lower incomes.
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