While homeowners across the United States have been loving the housing bubble which has dramatically driven prices up in some markets more than 30% a year (thus providing a comfy equity cow to milk through low adjustable-rate refinancing for enhanced consumption), the flip side of this bubble is proving less popular -- dramatically rising property taxes.
Soaring property taxes are a top worry in state legislatures across the country, where lawmakers are trying to appease disgruntled homeowners and, in some cases, courts that are demanding change in the system so schools are more equitably funded.The housing market has been particularly bubblicious in the west, none as bubbly as Las Vegas where prices are up 29.4% over the last year and a stunning 90.0% over the last three years. In the casino capital, property tax rates are 77.92 cents per every $100 of assessed value. So back in early 2002 the owner of your average Vegas home was paying $1192.95/yr. in property taxes, while in early 2005 the bill has jumped over a thousand dollars to $2267.47/yr. According to HUD, Las Vegas median family income over the same three-year period rose some $2250, so property taxes alone are eating up around half of the income gain.
Some states are weighing plans to lower taxes. Others just want to keep them from rising too fast. Still others are aiming to substantially change the tax system and find another way to help pay for schools that closes the quality gap between wealthy and poor communities. . . .
"Property tax relief is the mantra of the day," said Bert Waisanen, an analyst at the National Conference of State Legislatures who tracks tax policy. "States are acting to provide as much additional relief as they can afford to."
As a result, we're beginning to see miniature Proposition 13 movements across the west once again. Last month Nevada passed a law capping annual tax increases on owner-occupied single-family homes in the state to 3% a year, while some are angling for a constitutional amendment limiting it to a mere 2% a year. Clearly middle class Las Vegasians (is that what residents of Vegas are?) want all the gravy that comes from a housing bubble but none of the washing up.