<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html>
<head>
<meta content="text/html; charset=ISO-8859-1"
http-equiv="Content-Type">
</head>
<body text="#000000" bgcolor="#ffffff">
thanks for the help. my head is spinning. Can't understand any of
it. judy<br>
<br>
On 07/09/2011 03:31 PM, Jonathan Wetmiller wrote:
<blockquote
cite="mid:1310239919.88434.YahooMailNeo@web120815.mail.ne1.yahoo.com"
type="cite">
<div style="color: rgb(0, 0, 0); background-color: rgb(255, 255,
255); font-family: arial,helvetica,sans-serif; font-size: 10pt;">
<div><span>This blog post explains the situation pretty well:<br>
</span></div>
<div><span><br>
</span></div>
<div><span><a class="moz-txt-link-freetext" href="http://weblogs.baltimoresun.com/business/realestate/blog/2011/07/propertytax_bill_rising_heres_one_reason_why.html">http://weblogs.baltimoresun.com/business/realestate/blog/2011/07/propertytax_bill_rising_heres_one_reason_why.html</a></span></div>
<div><br>
</div>
<div>As it explains, if you look at your tax bill, start with
the line that says City Tax and subtract the city assessment
credit value from that amount. Multiply the result by 100, and
then divide it by 2.268. That's the amount you're actually
paying taxes on. I'd be willing to bet that it's less than
$116,000 in your case if you've lived in your house for a whi</div>
<div><br>
</div>
<div>Property values went up by such a large degree during the
credit bubble that it's going to take a long time for taxes to
catch up, even with the recently lower assessments, since the
tax can only rise by 4% per year with the homestead tax
credit.</div>
<div><br>
</div>
<div>Personally, I wouldn't mind seeing the credit done away
with in favor of a much lower property tax rate for everyone.</div>
<div><br>
</div>
<div>Jon <br>
</div>
<div style="font-family: arial,helvetica,sans-serif; font-size:
10pt;">
<div style="font-family: times new roman,new york,times,serif;
font-size: 12pt;"><font face="Arial" size="2">
<hr size="1"><b><span style="font-weight: bold;">From:</span></b>
jberlin <a class="moz-txt-link-rfc2396E" href="mailto:jdydee@verizon.net"><jdydee@verizon.net></a><br>
<b><span style="font-weight: bold;">To:</span></b> The
Charles Village Chat List <a class="moz-txt-link-rfc2396E" href="mailto:chat@charlesvillage.info"><chat@charlesvillage.info></a><br>
<b><span style="font-weight: bold;">Sent:</span></b>
Saturday, July 9, 2011 1:31 PM<br>
<b><span style="font-weight: bold;">Subject:</span></b>
Re: [Chat] prop tax<br>
</font><br>
i appreciate everyone's response. However I still don't get
it. It sounds as if I am still paying the tax for last years
assessment and then some. 3 years ago my assessment was
116k. It went up to 133k. Now it is back down to 116k. Yet
I'm paying more than the previous yrs.<br>
<br>
On 07/08/2011 05:52 PM, Stephen J Gewirtz wrote:<br>
> Joshua is right about how the taxes work. Under the
homestead tax law, if your home is owned by you and is your
principal residence, your effective assessment (what you
actually pay taxes on) can go up by no more than 10% per
year compounded. The 10% figure is used for state tax
purposes (if you look at your bill, you will see that it
shows both a City tax and a State tax). And the counties
and Baltimore City are allowed to use the 10% figure or to
adopt a lower figure -- Baltimore City uses a 4% figure --
for local tax purposes.<br>
> <br>
> If you look at your tax bill, it shows a State tax rate
of 0.112% and a City tax rate of 2.268% of the assessed
value of your house, and it gives the State and City taxes
based on your assessment and based on those rates, as well
as a total tax. Those two numbers will be a lot less than
they were last year because of the lower assessments. Those
numbers reflect what you would pay if there were no
homestead tax credit.<br>
> <br>
> The next two lines on the bill are a State assessment
credit and a City assessment credit. Those lines represent
how much you are saving because of the homestead tax
credit. And the line after that is the net tax amount,
which is how much you have to pay if you pay in August or
September (you get your tax reduced by one half percent if
you pay in July).<br>
> <br>
> Let me take my own house as an example. Six years ago,
my house was assessed a little bit more than $83K. Three
years ago, it was assessed for a little bit more than $255K,
i.e. it a little bit more than tripled. This year, it was
assessed for a little bit more than $178K.<br>
> <br>
> So, six years ago, five years ago, and 4 years ago, I
paid a tax on $83K of assessment (actually, I paid less than
that. because the $83K was an increase over the previous
assessment, and that increase was phased in over 3 years).
Then, three years ago, I paid an actual State tax based on
an assessment of $83K * 1.10 and a City tax based on an
assessment of $83K * 1.04. And I paid an actual tax that
went up similarly each of the following two years. So last
year, my actual State tax was based on an assessment of $83K
* 1.10^3 =. $83K * 1.331, and my actual City tax was based
on an assessment of $83K * 1.04^3 = $83K * 1.124864. These
figures were way below the actual assessment of $255K
(actually, that $255K was phased in over 3 years, but the
phase-in did not affect the actual tax)<br>
> <br>
> For this year, my assessment went down to $178K (and an
assessment decrease takes effect immediately rather than
being phased in over 3 years as an increase would be). But
my actual State tax is based on an assessment of $83K *
1.10^4 = $83K * 1.4641 = $121,520, which is much less than
the actual assessment of $178K. And my actual City tax is
based on an assessment of $83K * 1.04^4 =. $83K * 1.17 =
$97K, which is also much lower lower than the actual
assessment of $178K. The difference between a tax based on
the actual assessment and the tax based on having the
effective assessment go up each year by no more than 10% for
State tax purposes and by no more than 4% for City tax
purposes is the homestead tax credit shown on the bill as
State assessment credit and as City assessment credit
respectively.<br>
> <br>
> A useful figure is how long it will take your tax to
double. Your tax can double in x years, where x is the
solution to the equation 1.10 ^ x = 2. In other words, your
State tax will double in 7.27 years (i.e. will almost double
in 7 years, and will a bit more than double in 8 years).
Your City tax can double in y years, where y is the
solution to the equation 1.04^y = 2. In other words, your
City tax can double in 17.67 years (i.e. will almost double
in 17 years, and will a bit more than double in 18 years).
One way to approximate this doubling time is to divide the
annual percentage increase into 72. So, for example, State
tax can double in approximately 72 / 10 = 7.2 years, and
City tax can double in approximately 72 / 4 = 18 years.<br>
> <br>
> And yes, Joshua is right about how the system can be
viewed as unfair to someone who has just bought a house. If
mine had sold three years ago for its assessed value of
$255K, the new owner would have paid a tax based on an
assessment of $255K, i.e. would have paid roughly triple
what I paid. And this year, he would have gotten a sizable
decrease to a tax based on an assessment 0f $178K, but still
would be paying a lot more than I am paying.<br>
> <br>
> Your assessment is what the assessor estimates that
your house will sell for. So without a homestead tax
credit, you basically are taxed on what the State estimates
that someone will be willing to pay for your house. What
the homestead tax credit does is to give some protection to
long term homeowners so that, for example, when the assessed
value of my house tripled three years ago, my tax did not
triple over 3 years (since the increase is phased in
linearly over 3 years). It enables long term homeowners to
keep their houses when their houses become far more
desirable to people seeking homes.<br>
> <br>
> Steve<br>
> <br>
> On 7/8/2011 2:48 PM, Joshua Fruhlinger wrote:<br>
>> OK, so I just looked at my own email and realized
that was way too complicated an explanation. Here's a
simpler one:<br>
>> <br>
>> Your property tax bill is EITHER 2.268 percent of
the assessed value OR 3 percent more than you paid the
previous year, whichever is LOWER. If you've lived in your
house since before the property bubble, your assessment
probably went up very fast in the mid '00s and then came
down a somewhat (but not back to the original level) in the
late '00s/early '10s. So for many people, even if the
assessment has gone done, a 3 percent INCREASE over your
previous year's bill is still going to be LESS than 2.268
percent of that reduced assessment. Basically, the taxes
you've been paying still haven't caught up to your
assessment, and will keep increasing 3 percent a year until
they do.<br>
>> <br>
>> (Note that I'm not sure if 3 percent is the exact
value, but it's something close to that if not. And this
only applies if you live in the property we're talking about
-- that's why it's called the "homestead tax credit" -- and
if you were living in it the previous year. The first year
you own the house, youpay 2.268 percent of the assessed
value, and that's your baseline going forward.)<br>
>> <br>
>> jf<br>
>> <br>
>> On Jul 8, 2011, at 2:13 PM, Joshua Fruhlinger
wrote:<br>
>> <br>
>>> If you're getting a homestead tax credit, your
tax can only go up a little bit every year (I think 3
percent) as long as you stay in your home. But it will go
up that amount until it hits the amount you'd pay without
the credit. After the housing bubble in the mid-'00s a lot
of property's assessed values went up so fast that people
with the tax credit never caught up.<br>
>>> <br>
>>> For instance:<br>
>>> <br>
>>> Say in 2006 the assessment of your house
doubled from 100K to 200K. Your theoretical tax would go
from $2,268 to $4,356. But because of the homestead tax
credit, your actual tax can't go up more than 3 percent a
year. So in 2006 you'd owe $2,336, in '08 $2,406, and in
'09 $2,478.<br>
>>> <br>
>>> Then in 2009 they reassess your value down,
from 200K to 150K. Now your theoretical tax drops from
$4,356 to $3,402. But because of the homestead tax, you
aren't paying anywhere near even that reduced amount. So
the tax you actually pay in practice in 2010 is still a
three precent increase -- $2,552. Your actual tax bill would
only go down if your house lost a lot more value -- if it
were assessed at less than $112,500 or so, with these
numbers.<br>
>>> <br>
>>> jf<br>
>>> <br>
>>> <br>
>>> On Jul 8, 2011, at 1:59 PM, jberlin wrote:<br>
>>> <br>
>>>> Have many people received property tax
bills higher than last year even with the lower property
assessment?<br>
>>>> <br>
>>>>
_______________________________________________<br>
>>>> Chat mailing list<br>
>>>> <a moz-do-not-send="true"
ymailto="mailto:Chat@charlesvillage.info"
href="mailto:Chat@charlesvillage.info">Chat@charlesvillage.info</a><br>
>>>>
<a class="moz-txt-link-freetext" href="http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info">http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info</a><br>
>>>> archive:
<a class="moz-txt-link-freetext" href="http://www.mail-archive.com/chat@charlesvillage.info/">http://www.mail-archive.com/chat@charlesvillage.info/</a><br>
>>> <br>
>>> _______________________________________________<br>
>>> Chat mailing list<br>
>>> <a moz-do-not-send="true"
ymailto="mailto:Chat@charlesvillage.info"
href="mailto:Chat@charlesvillage.info">Chat@charlesvillage.info</a><br>
>>> <a moz-do-not-send="true"
href="http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info"
target="_blank">http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info</a><br>
>>> archive: <a moz-do-not-send="true"
href="http://www.mail-archive.com/chat@charlesvillage.info/"
target="_blank">http://www.mail-archive.com/chat@charlesvillage.info/</a><br>
>> <br>
>> _______________________________________________<br>
>> Chat mailing list<br>
>> <a moz-do-not-send="true"
ymailto="mailto:Chat@charlesvillage.info"
href="mailto:Chat@charlesvillage.info">Chat@charlesvillage.info</a><br>
>> <a moz-do-not-send="true"
href="http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info"
target="_blank">http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info</a><br>
>> archive: <a moz-do-not-send="true"
href="http://www.mail-archive.com/chat@charlesvillage.info/"
target="_blank">http://www.mail-archive.com/chat@charlesvillage.info/</a><br>
>> <br>
>> <br>
> <br>
> <br>
> <br>
> _______________________________________________<br>
> Chat mailing list<br>
> <a moz-do-not-send="true"
ymailto="mailto:Chat@charlesvillage.info"
href="mailto:Chat@charlesvillage.info">Chat@charlesvillage.info</a><br>
> <a moz-do-not-send="true"
href="http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info"
target="_blank">http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info</a><br>
> archive: <a moz-do-not-send="true"
href="http://www.mail-archive.com/chat@charlesvillage.info/"
target="_blank">http://www.mail-archive.com/chat@charlesvillage.info/</a><br>
> <br>
<br>
_______________________________________________<br>
Chat mailing list<br>
<a moz-do-not-send="true"
ymailto="mailto:Chat@charlesvillage.info"
href="mailto:Chat@charlesvillage.info">Chat@charlesvillage.info</a><br>
<a moz-do-not-send="true"
href="http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info"
target="_blank">http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info</a><br>
archive: <a moz-do-not-send="true"
href="http://www.mail-archive.com/chat@charlesvillage.info/"
target="_blank">http://www.mail-archive.com/chat@charlesvillage.info/</a><br>
<br>
<br>
</div>
</div>
</div>
<pre wrap="">
<fieldset class="mimeAttachmentHeader"></fieldset>
_______________________________________________
Chat mailing list
<a class="moz-txt-link-abbreviated" href="mailto:Chat@charlesvillage.info">Chat@charlesvillage.info</a>
<a class="moz-txt-link-freetext" href="http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info">http://charlesvillage.info/mailman/listinfo/chat_charlesvillage.info</a>
archive: <a class="moz-txt-link-freetext" href="http://www.mail-archive.com/chat@charlesvillage.info/">http://www.mail-archive.com/chat@charlesvillage.info/</a>
</pre>
</blockquote>
</body>
</html>