gdm894 wrote:
Zeeshan Hamid wrote:
Gerry,
It sounds good in practice but it has ruined California's finances. It also doesn't solve my "moral" problem. A millionaire making $1 million / year can live in a bigger and more expensive house and pay a lower property tax than a 26 year old just starting out making $40k / year.
Zeeshan.
I wasn't trying to address your "moral" problem; rather I was suggesting my thoughts on the original poster's concern for seniors being taxed out of their homes (a moral problem in its own right).
I'm not aware of the cause(s) of California's financial problems but suspect it has more than just property taxes to blame.
There are two components involved in how much property tax a person pays; the assessed value of the property and the mill rate (tax payable is mill rate times assessed property value). Prior to the fairly recent implementation of "fair market assessment" as a way to increase the value of a property, a property’s value remained pretty much what is was when it was first built. You had properties in Toronto assessed at $5,000 that were selling for $200,000 or more. With this situation the kind of moral dilemma you describe could occur where someone living in a house they paid a million dollars for in Rosedale would pay taxes based on its assessment of $25K whereas the buyer of a newer house in Etobicoke would pay taxes on his $150K home (assuming an equal mill rate in both cases would mean higher taxes for the new home buyer).
Then along comes fair market assessment to "solve" the problem. Now the Rosedale home's value has been raised to $1M and the Etobicoke home to $200K and “everybody is happy” except for the retired couple who bought their Rosedale home for $25K back in 1930 and now can't afford the property taxes, they have to sell their home and move. Now we have a different moral dilemma.
All I'm suggesting is that a property’s "fair market" assessed value doesn't change until the property changes hands so that the original owners don't find themselves unable to pay the taxes on the "affordable" property they bought years ago before the neighbourhood changed or demand increased and property values soared. This would likely address your delimma in most cases as well since the millionaire would likely have bought the property for a million dollars resulting in an increased fair market assessed value.
Gerry
Lets meet over coffee one day to discuss this. Online forum is a poor medium for any in-depth conversation (too many chances of misinterpretation).
What happens in California is this: person A bought a house during the crash of late 80s for $200,000. In 2010 this house is worth $800,000 and the individual makes a great salary but the house is taxed as if it was worth $250K. In 2010 a young family in modest income buys a below-median-price home in California for $400K. Now person A who is richer, makes more money and lives in a more expensive house pays less tax than person B who is poorer, makes less money and lives in a half-expensive house. There has been a lot of studies done on California's financial woes and their proprety tax system.
Section 319 of the Ontario Municipal Act requires municipalities to provide tax deferral to all eligible property tax owners. Section 365 allows, but does not require, municipalites to enact other assistant programs (such as tax deferral).
I support tax deferral programs for long-time homeowners, if they meet certain criterias and would allow the Town to get a lein on their properties. If I were King for a day I would get rid of property taxes altogether and figure out a different way of funding municipal expenses. That, unfortunately, will likely never happen.
Zeeshan Hamid.
I think we hold very close to the same opinion! Yes, a topic as difficult as property tax isn't easily discussed on a forum so I'm up for a coffee discussion.
So let's get ourselves elected and start the ball rolling on this (or at least investigate and propose some improvements to the current system)!
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