Quote:
Originally Posted by DickR
The valuation on which the RE tax is supposed to be based is some (crude) measure of what someone else likely is willing to pay you for your property. The claim that "if you can afford to buy it then you can afford the taxes on it" loses validity as time goes on. The case of the property bought decades ago is a good example. The wealth of people of means who can afford vacation homes keeps bidding up the going prices (over time). The long-time owner essentially is paying a tax on someone else's ability to pay it.
The present system of leaning heavily on the RE tax is a sweet deal for towns on the major lakes, as they see a huge chunk of money coming in from people who don't use much in the way of services and also who have no say in the matter. I don't see this changing soon, but if it did, lakefront towns would be seriously impacted.
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DickR
When you own something that someone else covets, be it a piece of property, an old musclecar a rare toy or whatever, the value of that item will proportionally increase relative to the desire of the person who covets it most.
On one hand I do agree with you that the long time property owner is paying taxes based on what others are willing to pay for that property or a similar property. Not to be heartless but so what? That same long term property owner is going to be laughing all the way to the bank when he gets a huge $$$ amount when he sells the property. The same way the original owner of a 1965 Shelby Cobra is going to laugh when his $6000 sports car fetches 1.1 Million at auction.
Real Estate can fluctuate in value... I feel bad for the people who bought when the market was artificially high... alot of them are now upside down in thier mortgages or have watched thier home devalue dramatically. Hence all the foreclosures and short sales. On the upside, for other people its def a time for some real bargains. It is what it is. When some people lose, others win. It all depends on your perspective.
I blame the banks for the most part... the Feds def had some complicity. The Feds pushed banks into writing mortgages for lower income people. The banks said SURE! But instead of writing easy stable long term fixed rate mortgages, they wrote variable rate mortgages, knowing full well that once the gates were open and flood of people started buying house, the housing prices would go up, as would the risk of inflation and that would force the Fed to raise the Prime Rate to slow it all down.... the BANKS knew this when it all started. They knew it was a bubble that would eventually pop!
The banks could have very easily rewritten the shakey notes to avoid the meltdown... they chose not to. They didnt want to hurt thier bottom line. EVERYBODY involved in the process made alot of $$$.. and the taxpayers got stuck with the bill!
Woodsy