High Property Taxes Are A R/E Nightmare

High Property Taxes Are A R/E Nightmare

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home property taxes

Forget for just a moment the current problem impacting the real estate market — sub-prime lending. Sure, lending to people who are a higher financial risk has led to the increase in the current mortgage default rate, but that isn’t the only thing acting as a drag on some local housing markets.

Instead, there is one problem that continues to grow and, if left unchecked, will affect more homeowners than the sub-prime mortgage meltdown. I’m talking about property taxes which everyone has to pay, but in some markets around the country people are paying thousands of dollars more annually than just a few years ago. What makes all of this worse, is that in some of these same markets home values have actually decreased.

Here are some examples that I have learned about personally or have discovered via my research:

  • A home that has been sitting on the market in Glen Rock, NJ has all of the features that a buyer would want and is in a town that is very convenient for New York commuters. With a $500,000 price tag it is listed at just below market value. I’ve learned, however, that the property taxes on this home has risen to just over $1000 per month or $12,000 annually! Add that cost to the mortgage, insurance, utilities, and upkeep and there isn’t any question why the home has remain unsold for nearly one year.
  • For years, mobile home owners have been exempt from paying property taxes in Massachusetts. In one community, Chelmsford, the town has decided to levy a tax to bring in additional revenue. Up until recently, jurisdictions did not tax mobile homes because they are considered to be low-income housing. The move by the town of Chelmsford will add $30 per month to the rent bill for some mobile home residents.
  • Minnesota residents understand the negative effect that increased property taxes has on communities. The state ranks as one of the worst when it comes to home sales thanks to property taxes which have risen by $2 billion over the past five years.
  • Washington, DC residents have recently learned that their sky high property taxes are no longer the worst in that region. Unfortunately, the good news isn’t that their taxes have gone down, rather some Virginia and Maryland

communities have raised them much higher. In addition, the district offers a much more generous homestead benefit than its adjoining states, making DC life a little more appealing for taxpayers.

So, the next time you find yourself upset over the mortgage meltdown, pick up your local property tax bill and see how it has changed over the past five years. It could be that a much deeper crisis can be found on the bills of tax paying homeowners across the country.

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