Why you should vote against the Property Tax Cap

[vicupstate]

This November, all voters in SC will be voting on a Constitutional Amendment, to allow a 15% cap on the increase in property values for owner-occupied homes. While this has popular appeal, most people do not 'look deeper', nor did the General Assembly, when it voted on this.

Assuming, this passes, which is nearly certain, it would NOT in any way REDUCE the overall tax burden or level of spending, it would merely SHIFT who pays property taxes. Homes that appreciate significantly, would be sheltered from the full brunt of the normally accompanying increase in the relative property tax burden. However, that would merely be shifted to those who own property that did not apprreciate as much.

Basically, it benefits the rich at the expense of the poor. It also leads to a disparity in the taxes paid over time. Two houses in the same neighborhood, of the same value might pay substantially different amounts in taxes, even though both would be owner-occupied. The link provides the background of what has happened in FL, which passed similiar legislatuon years ago.

FL Homestead Exemption causing inequity in taxes

[monsoon]

My mom and dad bought their property in Myrtle Beach for $1000 in 1965. This would save them a lot of money in property taxes. Since they are now retired people on a fixed income it would be good for them.

[vicupstate]

My mom and dad bought their property in Myrtle Beach for $1000 in 1965. This would save them a lot of money in property taxes. Since they are now retired people on a fixed income it would be good for them.

At who's expense?

Are they in poverty? They already receive a $50,000 exemption just for being over 65 (assuming that is the case).

[kayman]

I must agree with Vicupstate, don't do it. Just look at Alabama, we have a cap bascially on our property taxes. Instead of paying a property tax we pay for in sales taxes and income taxes out our asses. I would rather pay a property tax upfront rather than have myself taxed to death evertime I get a paycheck or go to any store and buy something.

[monsoon]

Are they in poverty? They already receive a $50,000 exemption just for being over 65 (assuming that is the case).

Yes they do get this exemption, but like all property in Myrtle Beach, the value of their property has skyrocketed past this amount. It's not right to force people out of homes they have owned and lived in for 40+ years because the taxes on it get too high.

[Pillsbury]

^ Yeah, one of the downsides of gentrification as well. In places like Atlanta, neighborhoods that were once war zones get eyed by young professionals, they start buying property, and then the existing people are forced out because they can't afford the taxes. No one should have to sell their home because they can't afford taxes on it. To me, I think that when a person has lived in one place, has paid taxes on a piece of property for years, it seems to me that maybe they should be grandfathered in on something like this. Perhaps have a cap for people who've been in a place for a long time? Not sure if that makes sense.

[whitehourseview]

I loathe property taxes, of all sorts, they smack of fuedalism to me.

I'm planning on voting for the tax cap, not out of a desire to lower taxes but out of principle of disliking all property taxes, period.

[waccamatt]

This November, all voters in SC will be voting on a Constitutional Amendment, to allow a 15% cap on the increase in property values for owner-occupied homes. While this has popular appeal, most people do not 'look deeper', nor did the General Assembly, when it voted on this.

Assuming, this passes, which is nearly certain, it would NOT in any way REDUCE the overall tax burden or level of spending, it would merely SHIFT who pays property taxes. Homes that appreciate significantly, would be sheltered from the full brunt of the normally accompanying increase in the relative property tax burden. However, that would merely be shifted to those who own property that did not apprreciate as much.

Basically, it benefits the rich at the expense of the poor. It also leads to a disparity in the taxes paid over time. Two houses in the same neighborhood, of the same value might pay substantially different amounts in taxes, even though both would be owner-occupied. The link provides the background of what has happened in FL, which passed similiar legislatuon years ago.

FL Homestead Exemption causing inequity in taxes

I agree; this amendment should be voted against. I have more important amendments to be concerned about, though.

[krazeeboi]

^ Yeah, one of the downsides of gentrification as well. In places like Atlanta, neighborhoods that were once war zones get eyed by young professionals, they start buying property, and then the existing people are forced out because they can't afford the taxes. No one should have to sell their home because they can't afford taxes on it. To me, I think that when a person has lived in one place, has paid taxes on a piece of property for years, it seems to me that maybe they should be grandfathered in on something like this. Perhaps have a cap for people who've been in a place for a long time? Not sure if that makes sense.

I actually think that some places do indeed have provisions like this for longtime residents of gentrified neighborhoods.

[Spartan]

I have yet to see anyone actually explain how this puts increased burden on the poor. If anything this would save them from gentrification by limiting the increase in taxes. Also, woould you rather those neighborhoods in Atlanta continue to look like war zones? I have come to accept gentrification as the last step in the completion of the real estate cycle. It is very much an unfortunate one, but its necessary. If it didn't exist then many of the restored historic downtown neighborhoods and downtowns themselves that we enjoy today would continue to be urban wastelands.

Property taxes are an unfortunate necessity to pay for the services we damand of government, so you can't get rid of them entirely in this state.

[monsoon]

I actually think that some places do indeed have provisions like this for longtime residents of gentrified neighborhoods.

My mom & dad's neighborhood is not gentrified. There isn't one house on that street that has changed since they were built in the 60s and 70s and very few that have sold in the last 20 years. It's pretty much the same residents that originally moved in there though they are all getting elderly. The city has tax valued the land into the stratosphere however because they say this land could be sold for a huge amount of money so that puts a bad burden on these people. I think it is bad policy to force people out of the city due to property taxes.

[Spartan]

Really what they should do is limit the amount that the land value can be raised unless the propery is being sold.

[vicupstate]

Yes they do get this exemption, but like all property in Myrtle Beach, the value of their property has skyrocketed past this amount. It's not right to force people out of homes they have owned and lived in for 40+ years because the taxes on it get too high.

This is a legitimate problem and a legitimate need that should be addressed. However, why not address that problem specifically (residents in danger of losing their owner-occupied property), rather than institute a massive across-the-board constitutional change that will impact EVERYONE.

As written this change will affect all property owners, many in a negative way.

Charleston already has been down this road, and was sued by North Charleston. N. Chas. (with other affected parties) sued because there residents were stuck with paying higher taxes to compensate for the tax break given to Oceanfront and Historic Charleston properties which surged in value. North Charleston won, which is why a constitutional change is necessary to even implement this.

It cost Charleston County $9mm in legal costs and other costs to persue that option, BTW.

This is how it negatively impacts the poor. Most poor people don't live in the ritzy parts of their community. Consequently, their property values by and large do not rise more than the average for that community. A reassessment is done every 5 years and re-adjusts all taxable values in order to refect what has happened in the market. A reassessment is intended to be revenue-neutral. Since property values rise, the tax RATE (referred to as MILLAGE) is reduced, in order for it to be revenue neutral. Therefore, if your property value increase was LESS than the average for that county, your taxes would be lowered (all things being equal). If your property increased in value MORE than the county average, your taxes would go up (all things being equal).

This legislation would put a 15% cap on that increase. So if a beachfront, mountain view or otherwise highly appreciating property increased in value beyond 15%, the owner would be exempt from that part of the increase. REGARDLESS of how poor or needy, they may or may not be. That difference is then made up by the remainder of taxpayer's, because it must be revenue-neutral. Therefore, someone that would have gotten a tax cut, would have either a smaller cut, or an increase in their tax bill.

[Greenville]

This is a legitimate problem and a legitimate need that should be addressed. However, why not address that problem specifically (residents in danger of losing their owner-occupied property), rather than institute a massive across-the-board constitutional change that will impact EVERYONE.

As written this change will affect all property owners, many in a negative way.

Charleston already has been down this road, and was sued by North Charleston. N. Chas. (with other affected parties) sued because there residents were stuck with paying higher taxes to compensate for the tax break given to Oceanfront and Historic Charleston properties which surged in value. North Charleston won, which is why a constitutional change is necessary to even implement this.

It cost Charleston County $9mm in legal costs and other costs to persue that option, BTW.

This is how it negatively impacts the poor. Most poor people don't live in the ritzy parts of their community. Consequently, their property values by and large do not rise more than the average for that community. A reassessment is done every 5 years and re-adjusts all taxable values in order to refect what has happened in the market. A reassessment is intended to be revenue-neutral. Since property values rise, the tax RATE (referred to as MILLAGE) is reduced, in order for it to be revenue neutral. Therefore, if your property value increase was LESS than the average for that county, your taxes would be lowered (all things being equal). If your property increased in value MORE than the county average, your taxes would go up (all things being equal).

This legislation would put a 15% cap on that increase. So if a beachfront, mountain view or otherwise highly appreciating property increased in value beyond 15%, the owner would be exempt from that part of the increase. REGARDLESS of how poor or needy, they may or may not be. That difference is then made up by the remainder of taxpayer's, because it must be revenue-neutral. Therefore, someone that would have gotten a tax cut, would have either a smaller cut, or an increase in their tax bill.

Stop posting vicupstate, you are making too much sense.

[digital_sandlapper]

When I lived in Savannah, everyone dreaded tax re-assessment coming, especially in the older desirable neighborhoods like mine. Finally, they changed the law so that properties would not be re-assessed (and therefore taxes not go up) until after a property was sold. That way, you were

[Miesian Corners]

Isn't California's Prop 13 the same thing? In CA, it resulted in a cut in local property tax revenue of $6 Billion. Schools districts lost about half their property tax revenue. In response, the state passed a set of bailout bills and, using a surplus of $5 billion, replaced much of the funds the schools had lost. Overall, school revenues decreased by up to 15% in wealthy districts and by 9% in lower income districts. The overall result for California schools was that fiscal control moved from local communities to the state.

[Captain Worley]

I'm voting for it. My property tax doubled last year. And, no, I'm not rich and I don't live in a trendy neighborhood.

[vicupstate]

Isn't California's Prop 13 the same thing? In CA, it resulted in a cut in local property tax revenue of $6 Billion. Schools districts lost about half their property tax revenue. In response, the state passed a set of bailout bills and, using a surplus of $5 billion, replaced much of the funds the schools had lost. Overall, school revenues decreased by up to 15% in wealthy districts and by 9% in lower income districts. The overall result for California schools was that fiscal control moved from local communities to the state.

There would definitely be a shift of control from local to state, with this legislation.

I'm voting for it. My property tax doubled last year. And, no, I'm not rich and I don't live in a trendy neighborhood.

You might want to read this first. The tax break for the rich and trendy neighborhoods will be paid for by the rest of us. This is nothing but smoke and mirrors folks.

The Tax Cut that is mostly a hike.

This Reassessment amendment is separate from the recently enacted sales tax increase to reduce school taxes, BTW.

[kayman]

There would definitely be a shift of control from local to state, with this legislation.

You might want to read this first. The tax break for the rich and trendy neighborhoods will be paid for by the rest of us. This is nothing but smoke and mirrors folks.

The Tax Cut that is mostly a hike.

This Reassessment amendment is separate from the recently enacted sales tax increase to reduce school taxes, BTW.

It is a tax hike on everything but property taxes.

[Spartan]

When I lived in Savannah, everyone dreaded tax re-assessment coming, especially in the older desirable neighborhoods like mine. Finally, they changed the law so that properties would not be re-assessed (and therefore taxes not go up) until after a property was sold. That way, you were

[Captain Worley]

Vote for real change this election, regardless of what party they may represent. I know I will.

Amen.