Property tax questions

[djd66]

Being an out of state property owner, I have to drop my 2 cents (maybe the state of vermont will only let me drop .015 b/c I'm from out of town!)

1) Someone please explain why should I be paying a higher rate than someone who lives in town and uses all the services. I am not asking to pay a lower rate, I just think I should not be paying more. Wasn't that part of the reason for the Revolutionary War??? It is unAmerican! Makes no sense at all. I am actually surprised that this hasn't been challenged in the courts.
2) I would think that out of town property owners are actually a good thing for the local and state economy for many reasons, some of which include - we provide construction jobs, we go out to eat, we buy full price lift tickets,...
3) If you want to encourage behavior - subsidize it, if you want to discourage behavior Tax it. That being said, Vermont is discouraging out of staters from buying 2nd homes in this state because of the high property taxes. I would also argue it is also bringing down property values in desirable towns because they are taxed at such a high rate.

[random_ski_guy]

1) Do you know anywhere that allows 2nd home owners to pay a lower rate of property taxes? Wouldn't that make it cheaper for out of staters to buy land then those that live there? Why would anyone want to do that?

B) As for "being slammed" with the higher rate, it is 2.58 for non-residential and 2.33 for Homestead. By my calculations that gives a $25 difference for $100K. Step outside your door and look around. I think you're getting value. It isn't that I only think that now, but that I thought it when I first laid the money down to buy.

I don't understand the point here. Maybe I'm just not reading closely enough, but I don't recall anyone complaining that their taxes should be LOWER than those using homes as a primary residence. Rather, they are simply saying they shouldn't be HIGHER, especially in light of the fact that second home owners don't require the vast majority of services (expenses) that those taxes are used to pay for in the first place. I really don't understand how that could be opposed, unless you are simply looking to play petty class warfare and "soak the rich" so you (not you specifically, Jim) can enjoy a subsidized lifestyle.

I second Tin's words thoughts here completely. I am not advocating a lower tax rate on second homes, just equal treatment or darn close to equal treatment. And no, I don't know of any places that have lower rates for second home owenrs, couldn't imagine a place doing that in the US....overseas perhpas, but not in the US, not since the west was homesteaded and settled.

[random_ski_guy]

1) Do you know anywhere that allows 2nd home owners to pay a lower rate of property taxes? Wouldn't that make it cheaper for out of staters to buy land then those that live there? Why would anyone want to do that?

B) As for "being slammed" with the higher rate, it is 2.58 for non-residential and 2.33 for Homestead. By my calculations that gives a $25 difference for $100K. Step outside your door and look around. I think you're getting value. It isn't that I only think that now, but that I thought it when I first laid the money down to buy.

And remember, that these rates are figured after the CLA, which is their very strange method of bringing the assessment on your property value closer to where it should be. (ie, my property is valued at $28,000, and that is what the 2.33 is based on. If you can buy one of these units for $28,000... DO IT!)

The base rates, before the CLA, are 1.36 and 1.23, respectively.

III) I asked the question, not the last time that this came up, but the time before... What is the rate of your property tax on your primary residence. My 2003 rate in Dracut, Mass was 1.208. What is your rate? How does your primary assessed value compare to its actual value?

How does the 52.71 CLA compare to your assessed value and the value your 2nd homes are going for?

Lost-one, are you asking me? I don't think comparing my real estate tax rate in CT is relevant to this conversation, at least not to the aspect of property taxes that I am interested in which is higher taxation without representation. If you must know, my real estate taxes in CT are the lowest in CT and perhaps of the lowest in all of New England. Thanks to a high number of private school kids and a substantial amount of commercial property (office buildings) our mill rate is about 75bps or 3/4 of 1 percent (I guess this makes Warren VT about 3.1 to 3.44 times higher?). All homes are taxed at 70% of their assessed value. My place is assessed at exactly what I paid for it. Assessments are updated every three to four years.

Again, I just don't agree that out-of-staters should just roll over and accept a higher tax rate for simply being from out of state. I'm not looking to screw the local government or Uncle Sam either, I just want to pay my fair share however fair is decided. I just question if this is fair.

Switching tangents; If I were a local I would be a little concerned (but not terribly concerned) that the state budget would become overly dependant on this cookie jar. There is the potential for abuse and unintended consequences. It’s not a huge risk, but one to keep an eye on.

[Lostone]

Go away for a few hours...

SRO: I believe that the reason for the CLA is that many (most?) towns are behind on assessments and the CLA is an adjustment between the assessed value and the market value.

Tin: That was exactly what I thought people were saying, was that they should be paying less, as second homeowners. I can see your point that they should be paying the same, but also can see the side that says people that aren't living here might be able to pay more, to enable those that live here and supply the services to the second homeowners, to afford to live here.

With the high property values in the gold towns, it is difficult for locals to afford property. Thus, a number of locals moved into the ski condos, when the property values fell. I believe that is the justification the government used for placing the higher rate.

As for the comments about not getting a vote on the local taxes, (and other local government issues) again, I don't believe any state offers that to people who come from another state to buy second homes. You knew that when you bought second homes.

Random: Sounds like your home is right for you, if all you consider is taxes. In my viewpoint, there is more to life than taxes. When I moved up here, I knew it was far more expensive to live than where I was. There were more businesses, more competition and far more people. They build houses on lots that are the size of the house. Your tax rate sounds much better. I wouldn't think of trading with you.

I moved away from there. I pay more for everything. It is farther to go to get anything done. I can't make near the money I used to make.

Life is good.

But to be fair, when comparing tax rates, you should compare to Warren's basic tax rate, as the CLA is really an adjustment to the assessed value of the home, and Warren is nowhere near 80% of the value.

[random_ski_guy]

Random: Sounds like your home is right for you, if all you consider is taxes.
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Umm, you were the one that wanted to compare and contrast tax rates between Warren and non ski towns. You asked and I answered, isn't that what you wanted?

Way back when, at the start of this thread I asked Nutmegger about taxes because I like to pencil in all the costs associated with owning a home when building a budget. Did you take a leap and assume that since this was my only question that somehow this is all I really care about?

So no, offhand, I don't know of anyplace that affords second home owners political rights. Until recently, I don't think it needed consideration, but maybe now it does. I know in my childhood town in upstate NY the NYC second home owner crowd became so disgusted with local zoning politics that they, enmass, changed their domicile to upstate so they could win control of the town board. In 2006 they where successful in installing two of their candidates with the write-in votes actually deciding the second seat. Now after years of the yocal-locals (yes, I’m including my family when I say 'yocal') shutting this group out, now it is the locals that are shut out as the population tide has turned and/or changed their primary residence.

Rhetorical question, in percentage terms, at what level of disparity between the two rates would this become a Supreme Court case? 100%, 300%? I would imagine this has already been challenged and lost. I just wonder, for arguments sake, at what level of disparity with the courts reconsider.

[ski_resort_observer]

I know in my childhood town in upstate NY the NYC second home owner crowd became so disgusted with local zoning politics that they, enmass, changed their domicile to upstate so they could win control of the town board. In 2006 they where successful in installing two of their candidates with the write-in votes actually deciding the second seat. Now after years of the yocal-locals (yes, I’m including my family when I say 'yocal') shutting this group out, now it is the locals that are shut out as the population tide has turned and/or changed their primary residence.
.

And you wonder why some locals are wary of out of state second home owners. This has been discussed ad nauseum for many years. A few years ago the town of Killington voted to secede from Vermont over this issue. In the many letters to the editor around the state about this many Vermonters thought it would be fine that they moved the town to NH. With all due respect the sense of entiltlement some people have these days is a mind blower.

[djd66]

"And you wonder why some locals are wary of out of state second home owners. This has been discussed ad nauseum for many years. A few years ago the town of Killington voted to secede from Vermont over this issue. In the many letters to the editor around the state about this many Vermonters thought it would be fine that they moved the town to NH. With all due respect the sense of entiltlement some people have these days is a mind blower."

So the way you deal with the '"wary" feeling you get from us second home owners is to hit us up with a higher tax rate??? This "wary" feeling you get sounds a lot like racisim.

Entitlement???? I don't feel entitled to anything. Last time I checked this is America, if you have the money to buy a second home, well, enjoy yourself.

[random_ski_guy]

I know in my childhood town in upstate NY the NYC second home owner crowd became so disgusted with local zoning politics that they, enmass, changed their domicile to upstate so they could win control of the town board. In 2006 they where successful in installing two of their candidates with the write-in votes actually deciding the second seat. Now after years of the yocal-locals (yes, I’m including my family when I say 'yocal') shutting this group out, now it is the locals that are shut out as the population tide has turned and/or changed their primary residence.
.

And you wonder why some locals are wary of out of state second home owners. .

Exactly, so why put a stick in the beehive with the higher tax rates for second home owners. All my hometown did is ignore the second homeowner’s desire for some form of zoning. After ignoring their requests for at least a dozen years the tide turned and instead of some form of common ground zoning, the out-of-towners are about to pass stalinist zoning. Of course, no one will ever know for sure, but I think had the local populace enacted some form of mild zoning before hand, they would pacified the out-of-towners and put the issue to bed. Let me be clear, I don't see Warren at this level of tension, but lean on the second home owners enough and unintended consequence could happen.

[random_ski_guy]

With all due respect the sense of entiltlement some people have these days is a mind blower.

Could you clarify by what you mean with this statement?

Do you mean that its mind blowing that local people would play what is seemingly class warfare (haven't heard an economic reason for the higher tax rate on second homes) to shore up the local tax base, or that the second home owners when feeling mistreated would be interested in taking action?

My hometown had a little bit of the 'welcome to the area second homeowner, now kindly leave your money with the builders and lawncare people and don't let the door hit you on the way out mentality.' The attitude got them nowhere in the end because the long running demographic trends were not and continue to not be in their favor. The local youth for the past 25 years has always moved out for jobs while the new people coming in where almost always second home owners. Rather than making amends on the one issue the second home owners had (zoning), the locals dug in and finally they lost. My hometown is 2.25 hrs north of Manhattan. Its popular with those who want to spend every weekend out of the city.

[Lostone]

Split out the tax questions and complaints as Nutmegger is correct that his thread got massively hijacked... tho he is at fault, as he said

All the condos get slammed as second homes.

Please continue your tax discussion here.

[castlerock]

....but also can see the side that says people that aren't living here might be able to pay more, to enable those that live here and supply the services to the second homeowners, to afford to live here.

I've seen this point brought up before, but it doesn't sit well with me. As a second home owner, I am already paying more to supply the services to all. I pay taxes for the schools that I do not use. As such I am subsidizing the services for the locals. I am not saying that I shouldn't subsidize, but I sure as hell shouldn't pay more AND use less.

As an aside, I have looked at the Warren school. It appears to be phenomenal. It provides much, much more than the parochial school in Boston suburbia that my kids go to. This dichotomy is puzzling. I pay more taxes here for a school that is better than the one I pay private school tuition for, which itself is better than the public school which I also pay for! But at least I pay the SAME taxes as others for the other school I don't use.

[Lostone]

You pay nothing for the extra spent on the Warren school.

We voted for it in town meeting, knowing that that is added to our taxes... not yours.

I have no relatives in Vermont, using the school taxes I pay. I had no relatives in Mass using the school taxes I paid for over 30 years. I have no problem with that.

Ignorance costs more than education. The bill just takes longer to be rendered.

[castlerock]

You pay nothing for the extra spent on the Warren school.

We voted for it in town meeting, knowing that that is added to our taxes... not yours.

I have no relatives in Vermont, using the school taxes I pay. I had no relatives in Mass using the school taxes I paid for over 30 years. I have no problem with that.

Ignorance costs more than education. The bill just takes longer to be rendered.

How can this be added to your taxes and not mine? I'm the one paying more per $ of assessed value.

Just to make sure my position is understood.

I am NOT taking issue with public education. I am taking issue with paying more in taxes than a full time resident with a property of equal value.

I assert it is a matter of equality and fairness.

I value education more than any other governmental function. I have no qualms about paying taxes for schools (debacles in Iraq are another story)

I put my kids in a private school because of the importance of education. And in a certain way it made the public school financial situation better as it was three less headcount.

I voted FOR every property tax override to fund the public schools (that I didn't use....).

[Lostone]

How can this be added to your taxes and not mine?

It is in the tax bill explanation sheet, under Homestead Property.

[castlerock]

So does that mean that the non-homestead inequality is even more egregious?