Courtesy: NAHB. Please click on image to better view data.
I came across an interesting article from the National Association of Homebuilders (NAHB) newsletter. The summary of the article is that property tax receipts have remained relatively constant since the fourth quarter of 2010, despite the significant drop in related home prices. Here is link to the full article: http://tinyurl.com/d3kxsyw.
The article explains, “…while there has been some decline in the share of total state and local tax collections allocable to property tax receipts, the share remains high compared to historic norms.” The result, the author argues, is an elevated tax burden on homeowners. Real estate taxes (home and commercial property taxes) represent the largest source of income for state and local governments.
Property taxes, of course, go toward maintaining our municipal infrastructures, services and education. I am not making a political point and neither is the NAHB article. It’s simply an interesting pattern to watch and be conscious of – for our personal household economies, as well as those of our communities.
It’s important to note, and the article does touch upon this, that in most communities there is a delay between a property tax assessment and the actual market value. In La Plata County, for example, taxes are based on approximately two-year old real estate values. So the taxes due in 2012, were assessed in 2011, based on values from 2010. The easiest way to think of this is that you are paying on a two-year lag time of market value.
With this in mind, the author of the NAHB article acknowledges that the elevated burden on homeowners will lessen in coming years. The surprise is that we haven’t seen it yet.
Please note: the NAHB article does not indicate how many markets contributed to establish the statistics. Though I’ve used La Plata County to illustrate a particular example, I do not know if it’s tax receipts are consistent with those in the NAHB piece.
Thanks,
Jared
