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Old 07-10-2015, 11:25 AM   #61
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We have a similar over 65 tax exemption here. Your first $25,000 of home value is exempt from taxes if you are 65 or over, or younger if you are disabled.

It's for the owner if it's your primary residence, which is what the issue is here for the OP.

We are not 65 yet so I don't know if you fill out the application once and it's automatically applied in subsequent years or if it's a yearly application. If it's a yearly application for the OP's neighbor and the owner is no longer using it for their primary residence, then it could be fraud. Around here where home values are $125K - $160K a $25K exemption is significant.

Here in Ohio they recently put a $30,000 income limit on the exemption. That will index up a little every year but we will probably not qualify by the time we get to 65. Property owners who already had the exemption before the change get grandfathered in.

As for reporting this to the tax authority.... I think you have reason to ask them to inquire. On the other hand, we had a neighbor (now dead and gone) who picked a different neighbor to harass every year. After the year where they picked on us we essentially cut off all contact. It was not fun as they did things to neighbors involving calling city or county authorities regarding height and shape of bushes, a visible weed, storage of firewood, etc. For us they would call the police every time our son played basketball in the driveway. I didn't even know about it until an officer stopped by to tell me about it and told me not to change a thing, they like kids who play outside! This neighbor also had a lawyer send us a letter complaining about our son playing basketball as late as 10pm. DH called the lawyer and told him the kid is 8 years old, goes to bed at 9pm and we don't have an outside light on the driveway, that the neighbor is inventing problems as it seems to be our year to be targeted.

After our neighbor's behavior, I realized I didn't want to be like that to anyone else. I'm a live and let live kind of person and unless it was a really big problem (drugs, vermin, fire or safety issue) I would not report a neighbor.

Maybe whenever this house is next on the market the title company will research the tax history and see an issue.
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Old 07-10-2015, 11:32 AM   #62
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Actually that is the whole problem with the 65 exemption, it is assuming you don't have children and thus shouldn't have to pay for schools any longer....
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The whole notion of that is a silly slippery slope... with that logic people with no kids shouldn't have to pay school taxes either. We all benefit from an educated population, some more than others perhaps, but we all share in the cost as they will be your neighbors and the one providing goods and services to you.
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I don't think the assumption here is give the seniors a break because they probably don't have kids. But rather, give them a break because they've been paying into the system all these decades, in many cases more than their fair share, so now in their golden years, and perhaps on a fixed income, it's time to cut them some slack.....
To be clear, I wasn't suggesting that the reason that some seniors get a break is because they don't have kids... I was simply responding to karen's statement that they did. I think the reality is more complicated than that.

I guess I'm a bit sensitive to the issue because I had an argument with one of my golfing pals just yesterday who was suggesting that you should get a tax break on your property taxes once you are 70 because you aren't sending kids into the system.

I'm all for property tax relief for those who cannot afford their property taxes, but it make no sense that someone who can afford it should get a break of the magnitude in the OP just because they are old.

Even property tax relief for those who can't afford it has some unintended consequences. I was at a school budget meeting a few years ago and a gentleman got up and spoke about how he could not afford the significant proposed school budget increase (our school taxes are really high). A woman who is a well known liberal in town then got up and spoke of how there were property tax relief programs available for those who could not afford their property taxes. That would have been fine, but then she added in that for people on that program that voting in favor of the proposed school budget increase would not increase their property taxes so they should favor the school budget increase.
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Old 07-10-2015, 11:37 AM   #63
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I don't think the assumption here is give the seniors a break because they probably don't have kids. But rather, give them a break because they've been paying into the system all these decades, in many cases more than their fair share, so now in their golden years, and perhaps on a fixed income, it's time to cut them some slack.
I don't see how seniors have paid more than their fair share of taxes. If anything, it's the other way around. Government expenses have exceeded revenue for decades. No senior alive today ever paid as much of a percentage of their income in debt expense when they were young as the young people today have to pay. Young people today are paying off debt created by people the age of their parents and grand parents.
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Old 07-10-2015, 11:42 AM   #64
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...Even property tax relief for those who can't afford it has some unintended consequences. I was at a school budget meeting a few years ago an a gentleman got up and spoke about how he could not afford the significant proposed school budget increase (our school taxes are really high). A woman who is a well known liberal in town then got up and spoke of how there were property tax relief programs available for those who could not afford their property taxes. That would have been fine, but then she added in that for people on that program that voting in favor of the proposed school budget increase would not increase their property taxes so they should favor the school budget increase.
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Old 07-10-2015, 11:47 AM   #65
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OP I understand why you believe it's unfair, but that isn't what the county uses. My property tax is 50%higher than my 4 neighbor's. I contacted the appraisal office and guess what, they didn't care. In our case it was due to the fact our house was purchased, they built equilivent or higher end homes that were never listed. Heck we pay the same as the wealthy DR. across the road, his house is 10k square feet ours is 3800 square feet. We have 3 acres he's got 40, his was a 10k Sq. Ft. remodel. Makes all the difference in this county.
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Old 07-10-2015, 11:55 AM   #66
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What they will check likely is the address on her Drivers License and where she is registered to vote. If they match the address the issue is over. (might also check where any cars she owns are registered). Beyond that unless they want to pay for surveillance if the addresses are ok you have to assume she lives there. Note that an improper drivers license address is an infraction i.e. if you move you have some number of days to change your license address.
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Old 07-10-2015, 12:28 PM   #67
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Is this tax fraud? What would you do?

Depends on the law. Have you read it?

In my state most local property tax matters are governed at the state level.

There is a probably a web site available where you can review the actual law and the conditions for the preferential treatment.

What would I do?: If they are trashing up the neighborhood way beyond the community standards (and not just compared to the prior residents) I would consider reporting them. This could lead to further blight with other new residents.

I am dealing with that situation currently.

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Old 07-10-2015, 12:46 PM   #68
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it feels a bit inequitable when someone has 5 kids in public school and is paying less than half of the current tax rate...and I am paying full fare and have zero kids in school. The bulk of the taxes go to the school district.
That is a public policy issue.

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the husband has just started some sort of distributorship out of his garage.
Operating a business out of the home, especially one that involves customers visiting, may violate some municipal bylaw. It would be legitimate to make inquiries about that at City Hall.
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Old 07-10-2015, 12:52 PM   #69
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Beware, naked link below. Look up MD property tax.

SDAT: Real Property Search

END NAKED LINK
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Old 07-10-2015, 12:56 PM   #70
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BTW, every gov't entity has a fraud line. If you suspect something you should tell someone.

Since the controls on many giveaways are loose, good gov't relies on ordinary citizens to report on such things. I am on the fence about this. Part of me wants to LOL, the other half says it is my civic duty.
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Old 07-10-2015, 12:59 PM   #71
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At this point it is a SUSPICION you have that she may not meet the qualifying criterea for the exemption which you feel MIGHT be unfair since she MIGHT not be living in the house and so for YOUR suspicions the jurisdiction SHOULD spend money investigating to try and determine if YOUR suspicions are correct because you pay more taxes.

My question is, if you are running a government how many of people's suspicions in your jurisdiction should be investigated and spent money on to ensure noone is getting a tax break where one is not deserved.

I suggest if you are truly believe this is something your community should not allow then you should have the guts to go to the house and ask about how they get their tax break and how they meet the requirements when it appears the mother doesn't live in the house. You could even be honest and state because you are paying such a high amount of taxes you were wondering what the rules were to get a favorable rate. Then you would have facts that you could approach the proper authorities and ask if this is correct for mortgage exemptions.

To be the guy behind the scenes trying to get the government to investigate a neighbor for you is not right in my books without discussing with the neighbor first.

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Old 07-10-2015, 01:10 PM   #72
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I don't see how seniors have paid more than their fair share of taxes. If anything, it's the other way around. Government expenses have exceeded revenue for decades. No senior alive today ever paid as much of a percentage of their income in debt expense when they were young as the young people today have to pay. Young people today are paying off debt created by people the age of their parents and grand parents.
On some things like social security, yes. Property taxes, not necessarily. For instance, my grandparents have been paying property taxes since something like 1947, when they bought their first house. Now, I can't remember what the statistic is, but either 55% of your property tax goes to fund the state public school system, or 55% of the public school system's budget comes from property taxes. I remember there was a 55% in there, somewhere.

So, in my grandmother's case...my Mom graduated high school in 1967, and my uncle in 1971. So at the point, they no longer had kids in the system, yet their taxes were still funding the school system. Grandmom just died this year, so that means that her property taxes were still funding the school system for forty four years, after her last kid graduated.

Someone who's younger, and hasn't been a homeowner for as long, hasn't funded the schools for as long. For instance, my Mom was a homeowner from around 1970-77, 1979-80, and 1989-today. So she hasn't paid into the system for as long. And I've only been a homeowner, and paying property taxes, from 1995-today, so I've paid in less as well. And someone who is a life-long renter will NEVER fund the school system.

So in this case, the older people, who have been homeowners for a long time, HAVE paid more into the school system than younger people. Now, when today's younger people get old, they'll be in the same situation, with regards to younger people at that time.
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Old 07-10-2015, 01:13 PM   #73
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Beware, naked link below. Look up MD property tax.

SDAT: Real Property Search

END NAKED LINK
Yep, I knew about that one for years. Oh, and I found the one where you can look up what the actual tax bill and breakdown is...turns out it shows the homestead tax credit, even!

Prince George's County, MD - Office of Finance : Property Tax Inquiry

Oddly though, it doesn't show that front foot fee I mentioned, anymore. It shows it, but there's a zero there...for my tax bill, at least. Maybe the county got rid of that?
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Old 07-10-2015, 01:14 PM   #74
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I don't have children but I don't mind paying for public schools, because I need educated young people to provide my healthcare, build my infrastructure, and run the country. I consider a well educated populace to be a public good.
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Old 07-10-2015, 01:27 PM   #75
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I don't have children but I don't mind paying for public schools, because I need educated young people to provide my healthcare, build my infrastructure, and run the country. I consider a well educated populace to be a public good.
Yeah, that's actually why I don't mind paying for the schools. Unfortunately, the schools in our county are so bad that people are pulling the kids out and enrolling them in private schools, so in effect many people are being taxed twice for their kids' education.

Recently the politicians wanted to try passing a bill that would raise our taxes 15%, to throw that money at the schools. Fortunately, a lot of people woke up and realized that if you just throw money at something that's broken, but with no plan to fix it, you're simply throwing that money away. It's gotten reigned in, and last I heard it was more like 4.5% they're calling for.

And, it may not be *that* bad, in the overall scheme of things. For instance, my tax bill was $3165 last year, but the county portion of that was only $1950. So I'd presume the 4.5% increase would only be on the $1950 and not the full amount.

Incidentally, here are the other line items on the tax bill...
$227: State of Maryland
$557: Park and Planning
$110: Stormwater/Chesapeake Bay Water Quality
$53: Washington Suburban Sanitary Commission (the corrupt quasi-governmental organization that provides our water and sewer)
$356: Trash removal
$62: Clean Water Act Fee (I think this is Maryland's infamous "Rain Tax")
-$160: Homestead Tax credit
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Old 07-10-2015, 01:36 PM   #76
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OP I understand why you believe it's unfair, but that isn't what the county uses. My property tax is 50%higher than my 4 neighbor's. I contacted the appraisal office and guess what, they didn't care. In our case it was due to the fact our house was purchased, they built equilivent or higher end homes that were never listed. Heck we pay the same as the wealthy DR. across the road, his house is 10k square feet ours is 3800 square feet. We have 3 acres he's got 40, his was a 10k Sq. Ft. remodel. Makes all the difference in this county.
That is odd in my experience. In our area, the whole assessment system is intended to create a grand list that is fair in relation to other similar properties so comparison between properties is arguably more important.

I guess that I am thankful that in our area property taxes are based on property market values (or close to) and there are no cockamamie stabilization schemes as they have in some parts of the county.
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Old 07-10-2015, 01:56 PM   #77
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The OP lives in Texas. Is it not true that the senior real estate tax reduction is really only a deferral? The latter means that the tax will eventually be settled when the property passes to the heirs.

I also think CA Proposition 13 is wrong. It would be OK if it were a tax deferral, as described above. Alleviating financial hardship on elderly home owners is one thing, but letting the heirs enjoy windfall profits is another.
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Old 07-10-2015, 02:00 PM   #78
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Actually that is the whole problem with the 65 exemption, it is assuming you don't have children and thus shouldn't have to pay for schools any longer, but especially during the recession that just wasn't the case..... It really should be when you apply for the exemption you also indicate, no children present in your home...that is the only way to be fair.
Maybe this varies from state to state. I'm in the same state as the OP. And DH has an over-65 exemption. In fact, when we obtained the exemption we actually did have a 16 year old child in our house. But, I disagree with your conclusion for several reasons.

1. The exemption does not mean that we don't have to pay school or other taxes. It simply caps the increases in taxes that you would ordinarily have.

2. The purpose of the exemption is not to exempt people from paying school taxes. We still have to pay school and other taxes. The point of the exemption is that without it many elderly people could be priced out of living in their paid for home because the taxes were going up because the house value went up. My mother is 91 and bought her house over 60 years ago. If she didn't have the over 65 exemption she would likely have to sell her house and move into an apartment due to the property taxes (she couldn't use the money to buy a new home because the taxes would cost too much). As it is, she can keep her home.

3. In our case, your argument doesn't even hold water because we were homeschooling our daughter. She never attended a public school in this county. That said, I don't mind paying the thousands of dollars of school taxes that we do pay (despite the exemption) because I believe that society benefits from public schools whether I chose to have my child attend one or not.
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Old 07-10-2015, 02:02 PM   #79
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The OP lives in Texas. Is it not true that the senior real estate tax reduction is really only a deferral? The latter means that the tax will eventually be settled when the property passes into the heirs.
Two different animals.

The over 65 exemption basically freezes your taxes (unless you improve your home). DH has one and we still pay about $5k a year in taxes.

There is a separate provision that can defer taxes as you stated. That is different from the one we've been talking about in this thread. We don't choose to defer since we can afford the taxes.
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Old 07-10-2015, 02:17 PM   #80
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OK, thanks.

Then, I would not permanently reduce taxes for the elderly. Tax is tax, period. People have to go to a homeless shelter if they want charity. Defer it, then get it when they die. That's as nice as I want to be. No exception. No Prop 13.

Anyway, I just looked at the Texas deferral rule, and man oh man, they charge 8% interest rate on the deferred amount.

That's usury rate! Aye, aye, aye...
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