Reform, housing bubble's burst delivers double shockSome homeowners face higher bills than neighbors By David Slade (Contact)
The Post and Courier
Saturday, November 29, 2008
Previous Stories2006 tax reform has some recent buyers seeing red, published 01/14/08 Bill aims to fix property tax reform fallout, published 04/22/08 Tax reform clause may be discouraging buyers, published 03/31/08 Talk about kicking them when they're down. Tens of thousands of people bought properties in Berkeley, Charleston, and Dorchester counties in 2007, only to see the value of many of those properties decline as the housing bubble burst. Then, those same people saw their property tax bills soar this year because of changes to the tax system voters approved in a 2006 constitutional referendum. "None of the taxpayers can understand it," said Berkeley County Assessor Ronnie Williams. "They don't like it because the neighbor is paying more than them." The property tax reform plan cut taxes for most people who bought homes before 2007 by eliminating the taxes on an owner-occupied home that went toward funding school operations. The plan particularly benefitted those with expensive properties, and also capped future tax rate and tax assessment increases. One trade-off in the plan was that people who bought property after 2006 would see their properties reassessed the following year at full value. In Charleston, Berkeley and some other counties, that means someone who bought in 2007 is now taxed on an amount that could be 50 percent higher than their neighbors who bought earlier, and whose homes are taxed based on what they were worth in 2003. "In most cases it's a pretty good bump," said Williams. The limits on future assessment increases will lock in the inequities, assuring that recently-sold properties will always get higher tax bills than similarly valuable properties bought years earlier. The other trade-off in the tax swap was a 20 percent increase in the statewide sales tax, to 6 cents on the dollar, which was meant to replace the lost school funding but has recently fallen short of what's needed, creating more budget problems for the cash-strapped state. Sales tax on groceries was reduced, then eliminated, as part of the plan. In Charleston County there were more than 15,000 property transactions in 2007 that triggered reassessment, representing more than 9 percent of all properties in the county. Most of the properties were sold in traditional sales, but transferring a family home to a child, or from an individual to an LLC created to own the property, also triggers reassessment under the tax changes. In Berkeley County there were nearly 10,000 transactions triggering reassessment. Figures were not available from Dorchester County. All those reassessments mean a big increase in tax revenue for municipalities and counties. Before the tax reform plan, property sales did not trigger reassessment, and when county wide reassessments were conducted the law required tax rates to be lowered to account for the higher values. Now, some properties get higher tax values but tax rates stay the same. So, if the property's assessment goes up 50 percent, so does the tax bill. Reassessments due to the 2006 property tax changes added $101.8 million in assessed value to the tax roles in Charleston County this year. New construction added $97.6 million, making property sales a more important source of new tax revenue than construction. Charleston County Assessor Toy Glennon said that with the reassessments came a spike in assessment appeals, the process where a property owner can challenge the taxable value assigned to their property. The county saw nearly 700 formal appeals so far this year, and appeals can be filed until Jan. 15 by those who received change-of-assessment notices. Last year the county had about 300 appeals. Glennon and Williams said that, despite the poor housing market, even property owners who were just reassessed don't usually have grounds for an assessment reduction. Charleston and Berkeley counties both set the new property values at what they believed the reassessed properties were worth on Dec. 31, 2007, regardless of how early in the year they were bought. Berkeley County also sought to set the reassessment values at 90 to 95 percent of true market value, given what was happening in the housing market. If prices continue to decline, both counties anticipate there could be more appeals. Reach David Slade at 937-5552 or dslade@ postandcourier.com. |
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Posted by Neponset on November 29, 2008 at 7:11 a.m. (Suggest removal)
This is a real mess. New home buyers are getting hosed, while the counties and cities are getting a windfall from the new assessments, There should be a roll back in millage each year to create a zero gain in revenue, just as is done during a county wide reassessment every five years.
Don’t forget, new owners don’t get the 4% ratio, until they have lived in the house for at least one year.
My brother bought my mother’s house from the estate last year and the taxes for this year are astronomical - about 3X.
None of this can be good for the sale of real estate.
Posted by theronce on November 29, 2008 at 7:41 a.m. (Suggest removal)
Yes, a real fiasco fostered on the people by their government. As long as they can tax anything that you supposedly own, then you do not own it. Theoretically, if you do not pay your taxes on what you own, then the government can take it away at the point of a gun in needed. They tax your income before you get to see it, tax you when you buy someting, tax you to own it, and tax you to sell it. Has anyone heard of anything as stupid and oppressive as that. Free market, what a joke; the government does everything in its taxing power to kill free markets and commerce.
Posted by gencon1 on November 29, 2008 at 7:55 a.m. (Suggest removal)
This article is ridiculous. People are complaining because they have to pay tax on the actual value of their home?
Isn't that what you are supposed to pay? If you don't like it, eliminate property taxes altogether.
The answer isn't to hope you don't get reassessed, it that the value of your home doesn't dictate what you owe in taxes.
Posted by tc1 on November 29, 2008 at 8:22 a.m. (Suggest removal)
"and when county wide reassessments were conducted the law required tax rates to be lowered to account for the higher values."
If that was the case how come every time it happened our taxes suddenly went through the roof? Government had a tax increase without having to vote for a tax increase.
If they had done what they were supposed to do there would never have been a tax revolt even though the system had nothing to do with ones income and therefore ability to pay higher taxes.
Posted by moonpie on November 29, 2008 at 8:38 a.m. (Suggest removal)
Absolutely TC1, I never understood why the voters didnt catch on to this.
You know with the .1 road tax passed this Nov in Berkeley county that it now has 8% sales tax. I believe this is one of the highest in the state if not the entire souh east.
Posted by nappyd on November 29, 2008 at 8:54 a.m. (Suggest removal)
That is awfully unfair. Kind of a shame on you for affording a new house type of tax.
Posted by tc1 on November 29, 2008 at 9:04 a.m. (Suggest removal)
JimIslander,
Your class envy syndrome is self destructive. I am definetly one of the "us". Under the past system even though my income changed very little if any my taxes went up in a very large way constantly. They went up because of things I had no control over and with no regard to improvements or lack thereof to my property. This is the main method that supports "gentrification". Government simply and without a vote or discussion tax the "us" out. Blind efforts to punish the "rich" do trickle down.
Posted by tc1 on November 29, 2008 at 9:06 a.m. (Suggest removal)
One more point. Even though I could pay now, At the rate it was going I would have been taxed out of my home before I died.
Posted by laurasmorris on November 29, 2008 at 9:32 a.m. (Suggest removal)
This was supposed to be "tax relief," not an increase. Let this be a lesson to you: Don't vote for any more Constitutional amendments. It's easy to get rid of a law that has unintended consequences--not so easy to amend the Constitution.
Posted by magoo on November 29, 2008 at 10:23 a.m. (Suggest removal)
property values are down so the tax should go down also so why hasen't it thats the way its suppose to work
Posted by tc1 on November 29, 2008 at 10:39 a.m. (Suggest removal)
????????? "Why you would think uncapping the tax rate on expensive homes for the wealthy while yours can continue to be reassessed at a higher rate as "punishment to the rich" does not make sense." ???????????????????
Did not happen.
I repeat:
Blind efforts to punish the "rich" do trickle down.
Class envy is blind emotion and a tonic to the masses.
Posted by johnnyholmes on November 29, 2008 at 10:46 a.m. (Suggest removal)
Morning Spanker,
I heard on C-span during open phones 7-8 hour a caller say the key to fighting terrorism is just wait until mr. O'bama takes office and he will solve not only that problem but the economic problems as well. My friend I see a rough 4 years ahead on the "Good Ship O'bamapop" you telling that man to get out his wallet or checkbook is nothing compared to what the demoncRATS have planned for your money.
Posted by cplpunishment on November 29, 2008 at 10:54 a.m. (Suggest removal)
You DEMS control it all....either shut up and do something to help or find yourself out of office come next election time!!! I am so tired of you DEMS whining....thats all you ever do!!!
Posted by yird on November 29, 2008 at 10:54 a.m. (Suggest removal)
The other trade-off in the tax swap was a 20 percent increase in the statewide sales tax, to 6 cents on the dollar,
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Somebody help me. Not you Jim I Slander. All these gaffs can't be the work of Republicans.
Am I to believe that the State sales tax has only been 5% and all over that has been municipal(counties, towns, large subdivisions, home owner associations) entities screwing us out of our money any way they can?
Posted by yird on November 29, 2008 at 11:26 a.m. (Suggest removal)
I believe the $300 cap on automobile purchases was put on during Democratic Governor Riley's turn to screw things up
He raised the state sales tax from 3cents to 4cents to improve education.
Typical Democrat, wanting to make thing better by increasing taxes and always failing at everything except implementing the tax increase.
Posted by johnnyholmes on November 29, 2008 at 11:43 a.m. (Suggest removal)
If all the praying posters said just 1 little prayer for the grandson of perdition, aka JIslander, perhaps he would see the light. I have a theory he isn't a black liberal, rather just a guy who likes to stir up the pot. Now I hope mr. O'Bama becomes a good president, but then again I hope to wake up Christmas morning and find Brooke Shields under my Christmas tree!
Posted by exorcist_pencocky4u on November 29, 2008 at 11:52 a.m. (Suggest removal)
TC1, From the story -
"Charleston County Assessor Toy Glennon said that with the reassessments came a spike in assessment appeals, the process where a property owner can challenge the taxable value assigned to their property.
The county saw nearly 700 formal appeals so far this year, and appeals can be filed until Jan. 15 by those who received change-of-assessment notices.
Last year the county had about 300 appeals.
Glennon and Williams said that, despite the poor housing market, even property owners who were just reassessed don't usually have grounds for an assessment reduction.
Charleston and Berkeley counties both set the new property values at what they believed the reassessed properties were worth on Dec. 31, 2007, regardless of how early in the year they were bought.
Berkeley County also sought to set the reassessment values at 90 to 95 percent of true market value, given what was happening in the housing market.
If prices continue to decline, both counties anticipate there could be more appeals."
Is it possible that you paid a grossly inflated price for the property when you purchased it?
JimIslander, Would have you live a hate and misery filled life like he does instead of doing something positive for yourself.
Posted by exorcist_pencocky4u on November 29, 2008 at 12:13 p.m. (Suggest removal)
JimIslander, your lies simply unmask your own stupity. Liberal Socialist Democrats like yourself, have blocked needed reforms since Clinton. For the past 2 years the Liberal Socialist Democrats have controlled Congress and driven gas prices through the roof, blocked action on controlling the lending practices they put in place.
The tax increases for the bailout was a gift from the Liberal Socialist Democrats who control CONGRESS. Only Congress can raise taxes.
Posted by jsteph10 on November 29, 2008 at 12:14 p.m. (Suggest removal)
Jim, I am a registered Libertarain and have disdain for both parties. Both sides are full of crooks.
But, the most socialistic government that you speak of is made up of 2/3 by Democrats (House and Senate). Only 1/3 is Republican (President).
Posted by tc1 on November 29, 2008 at 12:45 p.m. (Suggest removal)
"Correct me if I'm wrong but wasn't this passed so as to cap the assessments on expensive homes while replacing these tax losses by assessing new homes at a higher rate? It has nothing to do with class envy it is simply a matter of fairness that an expensive home is taxed the same as a less expensive home."
You are wrong.
My relativly inexpensive home was also capped, not just the very expensive homes. As a result I will be able to stay in My Home just as the "rich guy" will stay in his, if he chooses, no matter what the taxes are.
"My statement that the rich will be able to keep more of their income compared to the average citizen was met with a response by you that it is class envy and that taxing the rich the same as the average taxpayer is a "blind effort" to punish the rich."
The rich will keep Less of their income as a percentage then "us" because their income is taxed higher then "us". They have more money so of course they will keep more money.
Say whatever you wish but I, a member of the "us", now have the same option as the rich, namely to remain in MY Home till death without the government taking it from me. Note that it was Not the rich who would take My Home. It was My Government that would take My Home.
Posted by jsteph10 on November 29, 2008 at 1:30 p.m. (Suggest removal)
Uh, the Democrats have been in control of Congress since midterms 06.
Posted by exorcist_pencocky4u on November 29, 2008 at 2:07 p.m. (Suggest removal)
Posted by JimIslander on November 29, 2008 at 1:14 p.m. (Suggest removal)
Posted by jsteph10 on November 29, 2008 at 12:14 p.m. (Suggest removal)
Jim, I am a registered Libertarain and have disdain for both parties. Both sides are full of crooks.
But, the most socialistic government that you speak of is made up of 2/3 by Democrats (House and Senate). Only 1/3 is Republican (President).
..........................................
Uh.. the election was held and it is true they did make huge gains but we still have a couple months before they take effect.
Don't kid yourself, this depression is going to be owned by whatever is left of the republican party and their supporters. Spin it how you want but Paulsen and Bernake are both Bush appointees.
Bush will go down in history as the worst American president.
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Who authorized the monies to be issued, to give to the bailout. Only Congress can raise money thru taxes.
You are indeed a Liberal, Socialist, Democrat bent on promoting lies, hatred and the destruction of the USA.
The Democrats have controlled Congress since 2006.
Posted by jsteph10 on November 29, 2008 at 2:13 p.m. (Suggest removal)
Wow. Of the House, Sentate, and President democrats have 2 out of 3.
Posted by justjerry on November 29, 2008 at 2:57 p.m. (Suggest removal)
From what our new prez and the economic plan his team has been promoting the looting has just begun. The huge checks that the Democratic Congress are writing now are expected to pale in comparison to what will be spent when they have an even more sympathetic potus in the white house. We are ALL getting ready to get taxed into a long road to the poor house after the new Congress and President give us the biggest deficit in history.
Remember that the president cannot spend a penny without Congressional approval and for the last 2 years it has been the leftist whackos in charge that have allowed the most free spending Republican president in history to keep on going. Unfortunately for us all the Republicans did not stop the Community Reinvestment Act or heed the warnings of pending disaster to prevent the current crisis. The Dems would never do anything about it because it benefited their voting base - ignorant poor people who thought that they were entitled to get credit whether they deserved it or not.
It will all be OK, however, because now with our new president I will be able to afford pay my mortgage and put gas in my car.
Posted by yird on November 29, 2008 at 6:07 p.m. (Suggest removal)
Jim I Slander Everything; Your rabid dislike for all things Republican is mirrored by Republicans similar feelings toward all things Democrat.
Time for a reality check. Bill Clinton, Bush Sr. Rice ,Albrite, Kissinger, Carter and most the movers and shakers in the DC cesspool are members of the Council on Foreign Relations.
The goal of this organization after you cut away the fluff is a one world government under the control of the UN.
NAFTA and CAFTA are just a couple of the stepping stones working toward that end. 900 page trade agreements are more than just that!
Once all small arms are removed from the general population (a pressing UN goal) only blue helmeted UN police will have guns and the duty of all people will be determined by the wants of those in power.
The Democrats have been more inclined to be sucked into this trap of one world socialist form of government but there have been plenty of Republicans guilty of the same criminal behavior.
Nearly all who go to Washington break the oath to “support and defend the Constitution against all enemies foreign and domestic" and therein lies the problem.
As we bicker among ourselves ( a house divided) those who are supposed to be looking out for the interests of the country are looking out for themselves and selling the country down the drain.
I may be as you say, a Dummy, but I've
ben around long enough to get a pretty good grasp on the overall picture.
How about you?
Posted by exorcist_pencocky4u on November 29, 2008 at 7:34 p.m. (Suggest removal)
Posted by JimIslander on November 29, 2008 at 2:28 p.m. (Suggest removal)
exorcist_pencocky4u-
Your socialist republican party and the criminal Bush are responsible for the bailouts to bankers.
You support republicans therefore it is YOU who are "bent on promoting lies, hatred and the destruction of the USA.".
Luckily we stopped you ignorant bootlicking traitors before the looting was complete!
Get used to it. There isn't a damn thing you are going to be able to do about it.
If you think anyone is going to lift a finger to help you you are crazy! You should be taxed out of existence since it was the policies you support that have destroyed our country! Who better to pay for Bush's crimes than YOU his loyal supporters? I hope you rot in hell after you are taxed into the poor house you traitor!!
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JimIslander, boy, I'm glad I don't live next to an insane lunatic like you.
Your rambling has shown your ignorance of what has gone on in our government.
Are you ready for the largest tax increase in this nations history? Its coming on January 1, 2011 at 12:00am. If you love all things Liberal, Socialist, Democrat this one will have you dancing a jig, right JimIslander.
When President Bush requested the income tax be lowered on middle and low income workers from 15% to 10% he could not get Democrats to agree. They agreed only to a temporary lowering to expire on 1/1/2011. If the Democrats don't agree to make it permanent it will climb back to 15%. Also a lot of the poor that Bush took off the tax rolls will go back on for much higher taxes.
Posted by elcid81 on November 29, 2008 at 9:35 p.m. (Suggest removal)
This needs to be changed. We moved back to Charleston after my retirement from the Army. We bought a small (1800 sq ft) home in Hollywood. Our taxes went up 520% for 2009. We know the property value has deceased in the time we have owned it. We appealed but we were rejected because of this new rule. What other options do we have? This truly sucks.
Posted by carolinaboy29556 on November 30, 2008 at 12:12 a.m. (Suggest removal)
I am glad that Williamsburg County tax is a whole lot cheaper than Berkeley, Charleston, and Dorchester counties!!!
Posted by scienceguy on November 30, 2008 at 9:30 a.m. (Suggest removal)
No offense to anyone, but I think many of you are missing the point in your hatred of the Democratic Party. This law does not reduce anyone’s taxes. Rather, it just changes who pays those taxes. Most South Carolinians will see an increase in their overall taxes and those who buy homes or make substantial improvements to their existing homes will see a dramatic increase in their taxes because they will be expected to make up the shortfall resulting from the cap. In the meantime, because the sales tax increase—which is with us forever--cannot make up the lost revenues local governments will increase Millage rates.
At the end of the day, this is not about “class envy”—whatever that means. It’s about a law that is very similar to one that was passed in California with disastrous results.
Incidentally, none other than Warren Buffett has said that Proposition 13 in California was a bad idea. But I guess his friendship with Obama makes him a Socialist so his ideas about economics and Capitalism should be ignored.
Posted by laurasmorris on December 5, 2008 at 7:55 a.m. (Suggest removal)
Come on, guys, this whole subject has nothing whatsoever to do with national polics. Besides, it's just too much of a stretch to blame anyone, Democrat or Republican, who hasn't even taken office yet. This is a mess made by our own Republican legislature here in South Carolina. While I appreciate that they were attempting to protect certain property owners (primarily seniors)from being priced out of their homes by property taxes, they didn't think this through. It was probably not their intent to greatly benefit the rich, but that has been the result. Since this was accomplished through a Constitutional amendment, it is extremely difficult to undo the mess. Thus my previous statement that we should be very careful when constitutional amendments are proposed. I voted "no" on every one of them in the past election.