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Neighbor not paying her fair share of property tax?
Old 07-09-2015, 06:16 PM   #1
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Neighbor not paying her fair share of property tax?

My neighbor's property taxes are capped because she has an over-65 surviving spouse exemption. So she is paying ~$2k/year in ptax. Without that exemption, the ptax would be ~$5k. To qualify for the exemption, you must occupy the house as your primary residence.

However, I do not believe the person on the ptax rolls lives there because the people I see at the house are the two thirty-something parents and their six kids. Occasionally I see an over-65 woman at the house but she appears to just be visiting. Personally I don't see how 6 kids plus 2 parents plus a grandma could fit in a 3br/2ba 2,200 sq ft house, but maybe.

I suspect that the MIL is letting her daughter and SIL and kids live in the house but keeping it in her name to avoid several thousand dollars in annual property taxes. One exception - if the owner was in a nursing home, and planned to come back to the house at some point, she could maintain her exemption legally.

Is this tax fraud? What would you do?

I am paying the market rate of +$8k in ptax, though I have a larger/more expensive house.
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Old 07-09-2015, 06:22 PM   #2
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Probably the best thing to to is contact the county assessor's office (or whoever handles property taxes where you are) and let them know of your observations. But it is up to them to do any investigations and take any action.
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Old 07-09-2015, 06:23 PM   #3
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Is this tax fraud? What would you do?

I am paying the market rate of +$8k in ptax, though I have a larger/more expensive house.
Few things are really no-brainers, but this is. If you manage to get her tax rates increased it will maybe make $2.50/year difference in your taxes, but probably not even that. OTOH you will be suspect #1 for the snitch, and these neighbors will hate you forever.

Your call.

Ha
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Old 07-09-2015, 06:25 PM   #4
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How would they know that soupxcan dropped the dime? Presumably there are other neighbors as well.
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Old 07-09-2015, 06:26 PM   #5
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Old 07-09-2015, 06:54 PM   #6
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Live & Let Live ...

I'm a libertarian, and if it doesn't affect me directly, its none of my damn business
+1.

I draw the line at health and safety issues that affect me. Had to call Code Compliance when the 4 foot weeds in the back yard of the vacant house next door died and dried out and the owner ignored polite requests to cut and remove the weeds. This is brushfire country and the Northern California equivalent of the Santa Ana winds could have turned a spark from a lawnmower or a kid's firecracker into a raging inferno burning half the houses on the street down if the fuel was not removed.
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Old 07-09-2015, 08:06 PM   #7
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MYOB.
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Old 07-09-2015, 08:18 PM   #8
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I'm a live and let live kinda guy too. But, if she is no longer a resident, it is tax fraud. Tax fraud is everyone's business. It does affect you, even if it is only a couple of bucks.


If you are worried about being called a snitch. Write an anonymous letter to the tax assessor and don't ever tell us you did so. If not you, then who. If not now, then when?
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Old 07-09-2015, 08:34 PM   #9
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Few things are really no-brainers, but this is. If you manage to get her tax rates increased it will maybe make $2.50/year difference in your taxes, but probably not even that. OTOH you will be suspect #1 for the snitch, and these neighbors will hate you forever.

Your call.

Ha
Sorry, but I think everyone paying their taxes helps maintain a strong society. I don't want to be in a country like Greece in terms of how people pay their taxes. BTW, I'll complain about the taxes I do pay just as loud as the next guy, but I will pay them.
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Old 07-09-2015, 08:42 PM   #10
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Originally Posted by soupcxan View Post
My neighbor's property taxes are capped because she has an over-65 surviving spouse exemption. So she is paying ~$2k/year in ptax. Without that exemption, the ptax would be ~$5k. To qualify for the exemption, you must occupy the house as your primary residence

Is this tax fraud? What would you do?
If what you say is true, then yes this is tax fraud.

What would I do? Not a damn thing.
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Old 07-09-2015, 08:48 PM   #11
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We had a problem in CA way back when where older folks on fixed incomes such as social security were losing their homes because they could no longer afford skyrocketing property taxes. We passed Prop. 13 that limited the annual increase on property taxes until the property was sold. So now two identical homes right next to each other could have property tax bills that are 3x different. It's not fair but it was the right thing to do. Sounds like your state has age and residency requirements that we do not have in CA. Legally she may be breaking the law but unless the family was doing something that was detrimental to the neighborhood I would let sleeping dogs lie. And this is coming from someone who is normally a troublemaker.
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Old 07-09-2015, 08:54 PM   #12
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How do you know what your neighbor's property taxes are in the first place?
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Old 07-09-2015, 09:01 PM   #13
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Are you sure she isn't in a nursing home and coming home for the occasional visit, as my MIL used to do?

You probably won't be satisfied until you call the City Hall. Maybe you can ask in a general way about it.

It would annoy me but I would let it go. Worse things could happen--taxes raised, the house goes to pieces because the owner cannot afford them, etc., etc.
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Old 07-09-2015, 09:06 PM   #14
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If the grandma is not living there 24/7, but is having her mail sent there, it would be very difficult to prove she is not residing there.

However...tax fraud is tax fraud. No ifs ands or buts.

I'm not sure what I would do, because creating an enemy living so close to me has its own negative consequences.

You have to decide if the potential negative repercussions are worth reporting the alleged fraud. Go slowly and carefully here.
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Old 07-09-2015, 09:11 PM   #15
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You suspect someone is evading local property taxes, but you don't really know for sure (she could be in a nursing home, she could even be in the house.)
You also don't know the whole story about what is going on with the people there. There could be a very good, decent reason why the owner of the house is inviting these members of her family to live there. She could be caring for her dying sister for a year, her mail still comes to the house, and has let these people live in her house for now--maybe that isn't allowed for in the rules, but the city would have virtually no way to enforce their rules in that case.

It doesn't sound like the family is causing any trouble for you personally. Maybe it's not as quiet as it used to be when the spinster was there alone, and maybe that's bothersome. If Mrs Smith is forced to sell the house to pay the taxes, you don't really know who will move in there. And if she wants to keep the place, she may have to rent it out to pay those taxes (rather than let her kin live there for free or reduced rent). Either way, you could end up with a worse situation next door.

Yes, it would bother me that somebody might be cheating on their property taxes, and I'd resent paying more than they do. I'd have to really examine my motives and decide if I'm upset about the property taxes or if the increased "buzz" at that house is really what's got me peeved, and reporting her for tax issues is a way to get things back the way I liked it before. Maybe you are entirely different, but I suspect that's how I'd perceive things. But given the totality of the factors, I don't think I'd feel comfortable reporting it, and wouldn't feel any obligation to do so.
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Old 07-09-2015, 09:15 PM   #16
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........However, I do not believe the person on the ptax rolls lives there because the people I see at the house are the two thirty-something parents and their six kids. Occasionally I see an over-65 woman at the house but she appears to just be visiting. Personally I don't see how 6 kids plus 2 parents plus a grandma could fit in a 3br/2ba 2,200 sq ft house, but maybe.......

Is this tax fraud? What would you do?.....
I know what I'm going to do. I'm going to go to bed tonight giving thanks that you are not my neighbor.

Oh, and I pay every penny of property tax (and other taxes) that I owe.
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Old 07-09-2015, 09:22 PM   #17
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But will you spend your time determining that your neighbors are or aren't paying theirs? There's a big difference between bitching about someone you think might not be paying their's, and narc'ing them out to the gov't based on a suspicion (no proof). If that's your thing, being a hermit might be your best bet for peace of mind, because everybody else is doing something wrong.
I don't know why you chose to make this into a personal attack on my lifestyle. I think you should be capable of stating your case without such comments.

"because everybody else is doing something wrong." is about the poorest excuse for any behavior I can think of. When my kids used the kind of excuse for doing something they were not supposed to do, it went over like a lead balloon.
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Old 07-09-2015, 09:24 PM   #18
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How do you know what your neighbor's property taxes are in the first place?
In many jurisdictions the property tax records are online. You can type the address or the owners name and see the taxes due. I have done this for a house I used to own for example. It may well vary by jurisdiction however.
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Old 07-09-2015, 09:28 PM   #19
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Just googling around I can't find anything saying you have to spend any particular amount of time in TX to be considered a resident. Same in FL, where my residency is. You just need to have your driver's license there and pay taxes there. So it's likely that even if she's there off and on she can still claim it as her primary residence. It's not tax fraud if the rules allow it.
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Old 07-09-2015, 09:29 PM   #20
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How do you know what your neighbor's property taxes are in the first place?
In my county, property taxes are a matter of public record. You can search the county tax assessor records online by owner's name, property address, parcel number, etc. The assessed value of a property is shown, along with the property tax amount, and whether or not the tax has been paid for the year. Several years' worth of records are recorded. I assumed this was true of all areas in the country.

I used this information when I was househunting years ago, to determine what the tax bills were on properties I was interested in, and what their assessed value was.

BTW, the same is true of personal property taxes in my county. Anyone can go online and find out what vehicles I have registered to my name, and whether I've paid the taxes on them for any year.

I always assumed this information was in the public domain everywhere.

Edited to add: I'd be curious to know whether there are communites where the tax records are NOT in the public domain.
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