The danger to longterm homeowners comes from any law that bases real estate taxes on sale price or "value", because as Melani is surely aware, a lot of factors determines "value". The "equalization between neighborhoods" that Melani mentioned cannot be done if the standard being used is purchase price, market value, or anything else based on money, because every neighborhood is different. Using a few of her examples from her earlier post: 102 West Highland Avenue, Chestnut Hill:2 story, semi-detached houselot size: 35' x 100'total sq footage of lot 3500livable sq footage of house: 2090 7020 McCallum Street, West Mount Airy2.5 story, semi-detached house with garagelot size 50' x 143"total sq footage of lot: 7,190livable sq footage of house 2860 716 South Clifton Street, Center City (11th and Fitzwater Sts)3 story row house with garagelot size 15' x 47'total sq footage of lot: 755livable sq footage of house 1149 1518 Naudain Street, Center City (beteen Lombard and South off of 15th)3 story row houselot size 16' x 40'total square footage of lot: 640livable square footage:1280 Obviously, the one constant in these examples is the price: $400,000. So did the Chestnut Hill and Mount Airy homebuyers get a sweet deal? Did the Center City buyers get ripped off? They all spent $400K, and yet that same $400,000 bought considerably more in West Mount Airy than it did in Center City. And if any of those buyers tried to buy something in Villanova for $400,000, they'd probably be laughed at. All of that is to say that "value" is subjective and is prone to a lot of factors; fairness not being one of them. If it were, no one would ask for and get $400K for a house in Center City that wouldn't make a decent closet in West Mount Airy. As far as Melani's example of different rates for the city wage tax, I never said there should be different rates; I said that the standard (the constant that is being used for making the determination) should not be based on value. Is it fair for the person living in the considerably smaller Naudain Street house to have to pay almost the same tax as the person living in the much larger McCallum and Highland ones? But because they paid the same price for the houses, similar taxes is considered "fair". If the constant in my examples above were livable space and lot size, "equalization between neighborhoods" could occur. Homeowners in Center City would pay substantially less than the homeowners in Northwest Philadelphia. Yet they would all be paying at the same predictable rate. And current homeowners would not have to be put in the position of fearing neighborhood improvement and worrying about losing their homes.
From: mlam...@aol.comdate: Mon, 5 Jan 2009 14:52:06 -0500Subject: Re: [UC] Taxation and the librariesTo: kallena...@msn.com; univcity@list.purple.com; briansi...@gmail.comin a message dated 1/5/09 12:18:43 AM, briansi...@gmail.com writes:....how about this for a solution?....for _primary residences_, people's _homes_... apply the new tax standard only to properties purchased after the date the tax standards take effect. This way, current homeowners won't have to worry or make radical readjustments to keep their homes. Their taxes remain as they are. But if they sell, the new tax structure applies to the new owners.----------------In a message dated 1/5/09 11:38:57 AM, kallena...@msn.com writes: If the city were to collect the same amount from everybody whose house has the same value, the City would have legions of people who would be forced to move because they could no longer afford to pay the property tax. A person who paid $50,000 for their house in the 1960's or '70's would now have to pay the same tax as someone who last year paid $500,000 for the house next door. The person who paid current market value would presumably have the financial ability to pay. That cannot be assumed about longterm homeowners. And longterm homeowners should not be forced to choose between providing for their families, and paying an exhorbitant property tax. I think that you rather radically misconstrued my example. I didn't say anything about taxes going up on all similar houses, every time a house sells. The taxes on the houses in my example weren't set by the BRT AFTER the houses sold for $400,000 - they were set THE YEAR BEFORE the sales, when the houses hadn't sold at all. The tax amounts on those houses are likely the same as the other homeowners on their blocks were and are currently paying - whether they arrived in the 1960s, as in your example, Karen, or in 2007. This is definitely the case at 426 S. 47th; you can look it up on Hallwatch.org. The sellers moved into the house in 1971. Yet their tax bill, $3372, is the same as that of their neighbors who arrived on the block in 2006. There's no increase for the neighbors based on the 2008 sale price, and no need for anyone to panic and move! My example was to show that there has to be equalization between neighborhoods, because assessors for different areas don't seem to be setting assessments at the same level even when the houses have the same value. I used current sales because we can be most certain of the actual market value for the houses that just sold - $400,000!If the end result of the BRT's corrections is to be tax neutral, then we're not talking about raising everyone's tax on the $400,000 house to the amount being paid by the highest payer now, to $3578. Nor are we talking about lowering everyone's taxes to the amount now paid by the lowest payer, $1542. We're talking about everyone paying somewhere in between those two rates. Some folks would pay somewhat more, and some would pay somewhat less. Brian, I'm not saying that on your block, taxes should increase to the point where they are unaffordable. I'm saying that if houses on your block are selling at about $400,000 and an assessor has set a rate for your block based on that, then the blocks in the Graduate Hospital area where houses sell for that amount shouldn't be paying lower taxes than you are - and the blocks in Chestnut Hill where houses sell for that amount shouldn't be paying higher taxes than you are. Your ideas for different systems of taxation are interesting, Brian & Karen, but not currently legal; PA law says that these taxes must be equal. The problem is that they are NOT equal right now; the city is breaking the law. The City is required by law to assess everyone at the same rate and have them pay the same property tax for all properties with the same value. (But there are legal ways to write special protections into the laws to postpone or otherwise soften the impact on the elderly, those on fixed income, and others in special situations. And of course, if the condition of your house is much different from the average condition of other houses on the block, that can affect your assessment, because it affects your value.) "Spot assessing" - the practice of raising the assessment only on the new buyer's house but not on similar houses on the block - is illegal. Turn the example around for a minute and let's talk about another tax we pay: wage tax. Would it be legal for the city to say that as the wage tax rate changed (up OR down; this tax has been going down), an employee would continue to pay the same rate as when s/he was hired, rather than having his/her tax rate adjusted along with everyone else's rate? Would we say, "you were able to pay that rate when you were hired, so you must still pay that rate, even though if you were hired today, your tax would be lower? Or higher; would it be fair to charge a new employee a higher rate?By law, that isn't how property or wage tax works! Everybody pays the same rate, no matter when they come or go. All properties worth the same amount of money are required to have the same property tax bill. And I checked today with an expert on Philadelphia property taxation, who tells me:<<I believe that this all should be corrected by the “new/actual” values that should be rolled out this year.>>Stay tuned!- MelaniMelani Lamond, Associate BrokerUrban & Bye, RealtorPA License Number AB048377L3529 Lancaster Ave., Philadelphia, PA 19104cell phone 215-356-7266 - office phone 215-222-4800 #113**************New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom00000026)
