| Author |
Message |
    
Tom
| | Posted on Saturday, January 13, 2001 - 4:24 pm: |     |
As west-side values have risen over the last few years, I've lost. Now when west-side values are going to drop, I'm going to lose again! Remarkable!
Here's your error: the formerly $400K home is going to cost the same per month when the sale price is lowered, because of the increased tax burden. Likewise, my house will cost the same, per month as my taxes go down, because I can raise the sale price. Finally...finally!...I'll get a little equity return on my investment! |
Face
| | Posted on Saturday, January 13, 2001 - 5:22 pm: | |
Tom, you obviously don't get it. The $400k home costs more per month because the mortgage is the same, but now there is an additional tax to pay. In many cases a lot more tax to pay! Your house will cost less per month, because of a lower tax rate. I hope you do sell your house and I hope you do get more for it. Then I wish you luck.
Tom, that is how you get a little! You derive a benefit, at the expense of someone else. Dragging someone else down is not a very positive view of gaining. I feel sorry for people like you. Your return on investment is perseved by me as being obtained by another persons pain. |
Lizzyr
| | Posted on Saturday, January 13, 2001 - 6:26 pm: | |
Random thoughts by a first time ever poster to the board:
One issue that seems to have been overlooked by those who are griping that their taxes were too high and now it's finally time that they are going down is that: you have always had the ability to meet with assessor, review your assessment and request that it be lowered based on comparable sales.
One fact that I have not seen mentioned is that the town was spending close to $100,000/ year in the past few year on tax appeals and typically losing. This was creating a situation of significantly lower taxes for some 'eastsiders' versus their neighbors. I would like to hear from 'eastsiders' who made such an appeal in the past 2 years how much difference they are experiencing in taxes.
Having spoken to many people in town, if you took the time to see Ed Gallante, he was generally fair and adjusted taxes to the best of his ability.
I have met with Certified and the biggest issue seems to be land value. I have a hard time believing my land is worth the equivalent of $1+ million/acre, when a 4-year earlier appraisal said $375K. Compared to many of my neighbors, I do accept the total valuation, but I find the components flawed.
Certified explained the way they came up with land values as: they looked at several recent sales in the area, determined accepted NJ costs for the improvements (house & garage) and then subtracted that number from the total sales price to determine the value of the land. They then applied that land value to a neighborhood, varying individual assessments by improvement values. From a statistical basis, this does not seem to provide enough data points, nor does it make allowances for inferior lots (corners).
Attention fellow 'westsiders', please don't be sucked up into this recall petition nonsense. There are 2 factions in the township Democratic party and this tax issue is being used by one to discredit the other...
Hope this adds some intelligent ideas to the debate... |
Melidere
| | Posted on Saturday, January 13, 2001 - 7:23 pm: | |
The problem with your intelligent contribution is that 20 year old valuations were ALL low relative to current values.
It's kinda tough to argue with the assessor that your house isn't worth 70,000. The issue is whether your house is still worth the SAME as the other house next to the train station 20 years ago when being next to the train station wasn't nearly as valuable. |
Melidere
| | Posted on Saturday, January 13, 2001 - 7:28 pm: | |
face
It isn't a 'perception' that the east sider's loss was the result of the west siders gain. It's a fact. Homes on the west side (now widely agreed to be subject to losing value due to higher taxes) have clearly gained due to unfairly low taxes.
East Siders have been paying 6 million more than their fair share and it has cost them in equity values. That's a fact.
Equalizing that isn't your 'LOSS' it is a rebalancing of an inequitable gain. |
Melidere
| | Posted on Saturday, January 13, 2001 - 7:28 pm: | |
. |
Buddy
| | Posted on Saturday, January 13, 2001 - 8:49 pm: | |
Tom,
Oh I get it now: we both put our homes on the market for 300k - mine valued at 400k but artificially lowered due to oversupply - and now we roll in the buyers.
When they compare homes they decide that even though my home is bigger, has more land, doesn't border Irvington and is selling for UNDER MARKET VALUE, that your home is the better deal because you are CURRENTLY taxed at 25% less than I am.
Of course the buyers would have the option of doing a tax appeal on my home next year and getting a reduction by that 25% and then they would have - what Joe - a nice little free equity gain when the market recovers.
You're dreaming if you think this is going to benefit you. My value goes down, yours goes down. Maybe even more. |
Eliz
| | Posted on Saturday, January 13, 2001 - 9:00 pm: | |
The east side will never be more sought after than the west side. Don't get me wrong I live on the east side and am very happy. I also have 2 eyes and know that aesthetically many of the streets are prettier, they are closer to the village, there is more land, and so on and so on. |
Melidere
| | Posted on Saturday, January 13, 2001 - 9:15 pm: | |
you are absolutely correct, Eliz. The question is at the margin, all else equal, what is the effect of the tax.
When they are complaining about theirs going up, then it has everything to do with property values. When they are talking about the ones not keeping pace..it has nothing to do with tax. |
Nilmiester
| | Posted on Saturday, January 13, 2001 - 10:46 pm: | |
Meli- Would you do the same thing on the stock market? Try to make everything equal? I mean no disrespect and do feel the taxes should be fair but sometimes it's taste like socialism. |
Melidere
| | Posted on Saturday, January 13, 2001 - 11:49 pm: | |
No disrespect taken. I couldn't imagine taking on the myriad issues of the fundamental fairness of one tax over another or all the complications of the social benefits of progressive taxes.
We can, however take a look at the issue of residential real estate and recognize that it is one of the most heavily subsidized assets that we own.
From the moment that we apply for a mortgage we are granted federal subsidy. FNMA and FHLMC, both agencies of the Federal government, have managed to greatly reduce both the downpayment required to own real estate and the interest rates that are payed by homeowners. Even borrowers that are not eligible for the FNMA or FHLMC guarantee are beneficiaries of the markets created by those entities.
We deduct mortgage interest from federal taxation, providing yet another subsidy for homeowners.
We exempt the capital gains of real estate from taxation for most americans until they take the gain and then we exempt it again under the one-time exclusion.
We allow all capital improvements to be exempt under all circumstances, even on sale.
We protect the equity in residential real estate from creditors in bankruptcy.
In Maplewood, in particular, our property is heavily subsidized by the state and the county in via the terrific transportation system, the roads, and the convenient access to one of the world's greatest cities.
We do, however, tax it. We don't even tax it as progressively as we do, for example, income tax. There is no marginal rate on property. It is basically a flat tax, taxed at the same percentage whether it is a modest 69,000 pillbox or a 5 million dollar mansion.
And property taxes pay for one of the most fundamental goods that the united states government constitutionally demands of it's citizens, a public education system. A strong public education system is the foundation of a strong economy, an adaptable and competitive labor force, in addition to local services that we depend on in times of need, our police and fire.
So, i resent it less than many other taxes. But I do admit that the property tax, in an increasingly mobile society, is becoming a divisive and destabilizing force in our communities, encouraging people to pay high taxes in areas with good schools and then move on.
At some point the cries for state or federal funding of education are bound to be heard, but the money is going to come from somewhere. If they decided to relieve us of the burden of school funding, they are going to get it from somewhere.
The people yelling the loudest about this revaluation would be in far worse shape if we were to rescind the interest deduction in favor of federal funding of education.
But we could go there, i suppose.
As to taxing the gains in stock, i think that many investors have learned in the very recent past that the stock market is a far riskier investment than real estate. It is an investment that is also fundamental to our economic way of life and taxing it like property would probably be counter-productive. |
Lseltzer
| | Posted on Sunday, January 14, 2001 - 8:43 am: | |
If you suggest taxing gains in stock before realizing those gains in order to analogize it to property taxes, perhaps you should also suggest exempting the first $500,000, making margin interest deductible, exemptingit from bankruptcy proceedings, etc. We could complete the analogy. I don't think anyone really wants that. |
Wilbur
| | Posted on Sunday, January 14, 2001 - 6:08 pm: | |
Melidere, you wrote "We exempt the capital gains of real estate from taxation for most americans until they
take the gain and then we exempt it again under the one-time exclusion."
Just pointing out that there is no more one-time capital gains exclusion on sale of real estate. I posted on this above, too. In 1997 the law was revised to allow unlimited capital gains exclusions up to $500,000, as long as it's your primary residence and you lived there at least two years. I guess a lot of people don't know about this rule! |
Lseltzer
| | Posted on Sunday, January 14, 2001 - 7:13 pm: | |
As long as we're getting philosophical about what we tax, I think this episode underscores some of the problems with the way we tax property. It isn't fair to assume that because someone lives in a more expensive house that they can afford to pay higher taxes.
The reason it's fair to do the reval (assuming accurate assessments) is that this is state law, and there is an equity issue in terms of treating all township residents equally, which is also required by state law. The township has very little freedom of action in this affair. It's also worth pointing out that Jerry Ryan has (even before the election!) publicly pointed out some of the problems with using property taxes as a main source of funding. Of course, there's nothing that local Mapewood government can do about this; only the state legislature and governor can change it.
Melidere suggests that not taxing a capital gain until it is realized is a subsidy. If this is what she meant, I have to disagree. Just because you own an asset doesn't mean you have the liquidity to pay taxes. Taxing capital gains before they are realized would force people either to sell or to borrow against the gain, unless they just happen to have other assets or income to use for the payments.
Much as I dislike income taxes, at least they are more fair than property taxes. |
John
| | Posted on Sunday, January 14, 2001 - 9:17 pm: | |
Lizzyr- Please keep posting you did shed some good light on the situation (for me at least).
Eliz- NEVER say Never. Have a positive attitude.
Melidere / Wilbur- I was starting to think I was the only one who was unaware of the change in the exemption. First I looked it up to confirm that Wilbur was right. Then I mentioned it to a few of my neighbors and friends. They all knew about it. |
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