Housing prices have tumbled in many areas. How should assessed valuations be determined such that property taxes are handled "fairly"? How should current homeowners who have experienced devastating losses in value wish this issue to be handled? Perhaps an even more challenging question, what about investors who have purchased greatly distressed properties? Should those who purchased a dwelling for $50,000 previously valued at $200,000 pay property taxes based on an assessed value closer to $200,000 or $50,000? What's "fair"?
I am afraid this is the most highly subjective of questions. Of course the buyer of a greatly discounted dwelling (and those who have experienced significant losses on their "investment") will in all likelihood claim it is more fair to pay taxes on an assessed value closer to $50,000, to him at least. Why should he pay taxes on an amount in excess of its purported value?
Conversely, a struggling municipality will likely claim it is more fair to pay taxes on an assessed value closer to $200,000, to it at least. After all, the buyer is getting such a steal of a deal that he makes up for the taxes he's paying in excess of its perhaps "truer" value.
So in a sense, it could be construed as unfair (in the buyer's favor) for getting such a deal on it which can be mitigated by making him pay taxes in excess of its value (to the buyer's detriment). In this way, the unfairness seems more or less neutralized.
To the municipality then, it continues to collect property taxes close to what it was previously (giving it no "free lunch"), allowing it to maintain essential services and other "quality of life" necessities.
Imagine buyers paying taxes on houses' "actual" values. What would happen to the municipality? It would likely collapse, creating perhaps even more loss of value! In short order, the bitching and complaining would focus on the quickly decaying municipality INSTEAD OF THE UNFAIR TAX ASSESSMENTS!
In the end, I am afraid NOTHING is "fair" when the shit hits the fan! Apparently, we ALL must get F_C_E_ up the you-know-what!
How then should tax valuations be "fairly" determined?
Perhaps they should be valued somewhere in the MIDDLE?
I am afraid this is the most highly subjective of questions. Of course the buyer of a greatly discounted dwelling (and those who have experienced significant losses on their "investment") will in all likelihood claim it is more fair to pay taxes on an assessed value closer to $50,000, to him at least. Why should he pay taxes on an amount in excess of its purported value?
Conversely, a struggling municipality will likely claim it is more fair to pay taxes on an assessed value closer to $200,000, to it at least. After all, the buyer is getting such a steal of a deal that he makes up for the taxes he's paying in excess of its perhaps "truer" value.
So in a sense, it could be construed as unfair (in the buyer's favor) for getting such a deal on it which can be mitigated by making him pay taxes in excess of its value (to the buyer's detriment). In this way, the unfairness seems more or less neutralized.
To the municipality then, it continues to collect property taxes close to what it was previously (giving it no "free lunch"), allowing it to maintain essential services and other "quality of life" necessities.
Imagine buyers paying taxes on houses' "actual" values. What would happen to the municipality? It would likely collapse, creating perhaps even more loss of value! In short order, the bitching and complaining would focus on the quickly decaying municipality INSTEAD OF THE UNFAIR TAX ASSESSMENTS!
In the end, I am afraid NOTHING is "fair" when the shit hits the fan! Apparently, we ALL must get F_C_E_ up the you-know-what!
How then should tax valuations be "fairly" determined?
Perhaps they should be valued somewhere in the MIDDLE?
Or perhaps it should depend on whether the losses in value are predicted to be short-lived or long-lived? If this is a very temporary blip, it seems more "fair" to leave the assessed values closer to their original values. On the other hand, if they are predicted to be protracted, perhaps they should drop correspondingly? But what if these predictions are wholly inaccurate?
REGARDLESS, IT SEEMS SOCIETY MUST COLLECTIVELY BEAR THIS UNPLEASANT BURDEN!
REGARDLESS, IT SEEMS SOCIETY MUST COLLECTIVELY BEAR THIS UNPLEASANT BURDEN!
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