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soupcxan 07-09-2015 05:16 PM

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.

Walt34 07-09-2015 05:22 PM

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.

haha 07-09-2015 05:23 PM

Quote:

Originally Posted by soupcxan (Post 1612455)
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

Walt34 07-09-2015 05:25 PM

How would they know that soupxcan dropped the dime? Presumably there are other neighbors as well.

DROPOUT 07-09-2015 05:26 PM

Live & Let Live ...

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

Another Reader 07-09-2015 05:54 PM

Quote:

Originally Posted by DROPOUT (Post 1612460)
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.

harley 07-09-2015 07:06 PM

MYOB.

CRLLS 07-09-2015 07:18 PM

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?

Hermit 07-09-2015 07:34 PM

Quote:

Originally Posted by haha (Post 1612457)
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.

Derslickmeister 07-09-2015 07:42 PM

Quote:

Originally Posted by soupcxan (Post 1612455)
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.

FIREd_2015 07-09-2015 07:48 PM

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.

EastWest Gal 07-09-2015 07:54 PM

How do you know what your neighbor's property taxes are in the first place?

Bestwifeever 07-09-2015 08:01 PM

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.

freebird5825 07-09-2015 08:06 PM

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.

samclem 07-09-2015 08:11 PM

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.

Calico 07-09-2015 08:15 PM

Quote:

Originally Posted by soupcxan (Post 1612455)
........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.

Hermit 07-09-2015 08:22 PM

Quote:

Originally Posted by harley (Post 1612498)
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.

meierlde 07-09-2015 08:24 PM

Quote:

Originally Posted by EastWest Gal (Post 1612502)
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.

harley 07-09-2015 08:28 PM

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.

Calico 07-09-2015 08:29 PM

Quote:

Originally Posted by EastWest Gal (Post 1612502)
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.

harley 07-09-2015 08:33 PM

Quote:

Originally Posted by Hermit (Post 1612512)
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.

I don't think you read this the way I meant it, but I apologize for it causing you annoyance. I'll delete it.


And also be aware there is an ignore list option. I doubt you'd be the first to put me on one.

jim584672 07-09-2015 08:40 PM

Snitches get stitches.

One person's tax exemption will not have any impact on your taxes, so chill out.

Siestatime 07-09-2015 08:57 PM

Quote:

Originally Posted by meierlde (Post 1612513)
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.


Zillow.com. Hello?


Sent from my iPad using Early Retirement Forum

MRG 07-09-2015 09:13 PM

I understand what right is I also understand being a neighbor whether I get along or agree with what they do.

Years ago we lived next door to a cocaine selling couple. I tried to turn them in, LE had nothing to go on. Then the tweaking dealers figured it out who narced. Pure h*ll till our lease was up.

I mind my own business today. Only exception is protecting my home and family.

Texas Proud 07-09-2015 09:15 PM

Quote:

Originally Posted by EastWest Gal (Post 1612502)
How do you know what your neighbor's property taxes are in the first place?

Don't know about OP, but where I live it is public records... online no less... easy to see anybody's tax bill....

34rlsa 07-09-2015 09:32 PM

Are they Greek?

target2019 07-09-2015 09:45 PM

It's difficult to live with a neighbor problem every day. And many homeowners get a tax break while others pay more. It just so happens that my next door neighbor had a tax bill less than 1/2 of ours. I never understood it, but as he got older certain circumstances became clearer to me. The house was a mess inside. Also found out there is no basement.

What did bother me was that his son who also lives in town would bring a large amount of questionable trash to the curb every week. The trash was produced by his business and he was breaking code I felt. However, I never complained, as I know that there are ways that information leaks out, and I did not want to have bad blood.

It does sound like you could cause the family some grief. Just tread lightly and make sure all of the facts are as you think they are.

turbo89 07-09-2015 09:55 PM

Another vote for MYOB. From you're post it's clear you don't entirely know the circumstances, so it's best to just move on and forget about it.

Sunset 07-09-2015 10:08 PM

Quote:

Originally Posted by DROPOUT (Post 1612460)
Live & Let Live ...

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

My friends the drug importers who drive 18 wheelers like your attitude. So does my distant cousin the serial killer :dance:

My wife told me to pretend I'm joking :facepalm:

Texas Proud 07-09-2015 10:10 PM

First, who would you report it to??

Second, what do you think they would do about it??


My prediction... nothing...


Here they send out a postcard saying that you still have your exemption... as long as the current resident does not say anything the exemption stays... I doubt they are going to go out and spend money on an investigation for at most a couple of thousand.... not in their budget and not worth their time...


BTW, since our house value is going up at a rapid pace I decided to take a look at our old house to see what they valued it at.... to my surprise I noticed that the single mom who bought the place did not file for homestead exemption...... and that is costing some big money since not only is she missing the exemption, but also the 10% max yearly increase... I thought about sending something to her, but then said... NOMB.... she was told what she needed to do at closing... she had her dad with her... if she fails to do it..... well, so be it...

pb4uski 07-09-2015 10:36 PM

At this point you have suspicions... and perhaps well founded suspicions. I would report them to the appropriate authorities then your duty is done. Their duty is to investigate the situation and if they find it is as you think, to take action.

If the situation is what you think it is then it is tax fraud and your neighbor is wrong.

However, recognize that there is some risk that if the neighbor finds out that you brought your suspicions to the attention of the authorities that they will likely be made as hell (keep your car in the garage if you have one).

daylatedollarshort 07-09-2015 11:16 PM

If they are keeping up the house, aren't having loud parties, don't leave barking dogs out all night, aren't busybodies, aren't driving too fast around the neighborhood, aren't having loud arguments, or otherwise not being the neighbors from hell, personally I would be grateful for living next door to nice, normal people and not worry about the taxes.

Property taxes here in California from one tract house to an almost identical house next door can vary by 10 times or more due to Prop 13, if one neighbor bought decades ago and the other home is a more recent purchase.

"The Bible tells us to love our neighbor, and also to love our enemies; probably because generally they are the same people." - G.K. Chesterton

Amethyst 07-10-2015 03:46 AM

I don't understand the issue. The owner qualifies for the tax break. She owns the home, and is the one paying the taxes. It seems like she would have the right to invite family members to live in her house where she pays the taxes.

There might be county regulations about exceeding the number of people allowed to live in one house, but that's not a tax issue.

Amethyst

Another Reader 07-10-2015 04:31 AM

Maybe she has a reverse mortgage as well. Why not look that up in the County Recorder's records and turn her in to the lender if she is not living there? That way the bank can foreclose on her for being out of compliance with the terms of the mortgage. "Justice" will be served, right?


My point is where are you going to draw the line? What is "your business" and what is not your business? If your neighbor is harming you and your neighborhood by selling crack to 10 year old kids, that's an obvious problem for everyone. But getting some kind of tax break because she might not be living in the house fulltime? That's a MYOB in my book.

clifp 07-10-2015 04:38 AM

Quote:

Originally Posted by Walt34 (Post 1612456)
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.

+1
It may or may not be a violation of the law. I think people cheating on their taxes is everyone's problems. I think sending a letter (perhaps anonymously) should be the extent of your involvement.

marko 07-10-2015 04:52 AM

Gaming the system, whether avoiding taxes (property, income, excise, liquor, sales, etc), fees, entitlements, etc is deemed a near professional sport in these parts.

Should I report my neighbor who drives 20 minutes to NH to avoid MA sales and liquor taxes? Or the guy who registers his car in NH but lives in MA to avoid sales, excise and registration fees? Or the folks who are getting multiple EBT cards and selling them for cash? What about the ones with multiple bankruptcies who buy all kinds of "stuff": cars, boats, houses with zero intention of ever paying for them? Or the older people who 'self impoverish' in order to get Medicaid pick up the nursing home tab? Or the guy who just won $2,000 off a bookie? What about the guy "working under the table" who collects unemployment?

At what point do you pick up the phone?

Andre1969 07-10-2015 05:09 AM

I just checked Zillow.com with regards to my own tax history, and it's strange. Their data on my place goes from 2005-2014. They nailed it for 2014: $3165. I paid $3164.63 in September of 2014. However, all the other data is way off. Oddly, 2005 is listed as $2359, which is what I paid in September of '04. But for 2006-2013 the numbers vary wildly from around $1600-4400, and my taxes have never been that low, nor that high.

My taxes crept up steadily through 2010, when they topped out around $3300, but then we got re-assessed for 2011 and they came down slightly, and have been fairly flat since.

Now, Maryland does something called a Homestead Tax Credit (or maybe it's just my county, Prince George's), that caps your annual property tax increase if the home is your primary residence. This credit shows as a subtraction on the line items of your property tax bill. I remember by the time 2010 rolled around, the total tax bill on my place was around $5000, but the Homestead Tax Credit had swelled to about $1700, hence the actual bill of $3300. Incidentally, the $4400 Zillow shows in my history was for 2010, so their algorithms were at least somewhat following the local market.

As for finding tax information online, In Maryland you can search for an address and find out information such as assessed value, the last 3 or 4 sales transactions on that property, year built, how much land, square footage, owner's name, whether it's the principal residence or not, etc. But I don't know how to pull up information on how much the property tax bill is. I think there is a way though, because there was one time I forgot to bring my tax bill/canceled check information with me when I had my income taxes done, but my tax man was able to go online to some site and get the exact information.

LOL! 07-10-2015 05:30 AM

Clearly the OP needs to write a Letter to the Editor of the local newspaper complaining about property tax fraud without naming any names. As in,

Dear Editor,

Does the County Tax Assessor ever go and check to see if a property has a legitimate over-65 exemption? I am sick of possible tax fraud in this County when it comes to property taxes. There need to be more audits and fact checking so that everyone pays their fair share of taxes and especially large families with lots of school-age children.

Sincerely, .


I think there was a similar thread recommending MYOB when employees were stealing from employers. This jist was "If Management is too stupid to see things right under their nose, then they deserve to be stolen from and I'm not going to report anything myself."

donheff 07-10-2015 05:58 AM

I'm with the live and let live contingent. There could be a number of reasons why the old lady is legit. Or she may be cheating but be under tremendous financial pressure trying to help a daughter who's spouse ran off leaving her broke or some such situation. As somebody said, cheating the taxman is practically a national sport. Where do you draw the line on vigilante enforcement?

jerome len 07-10-2015 06:34 AM

I'm sort of glad I'm not soupxcan......I'd hate to have the time to worry about this.

I live in a neighborhood with an HOA association.....it's the battle we, and only we, enjoy.

We stay out of neighborhood wars, no one wins. I can see getting involved if a neighbor has drug parties, steals from your garage, drives drunk.....but ours don't and they have "stupid" little wars.....should a tree get trimmed?.....is the paint color an unacceptable off shade of color?"......should the community pool be cleaned in the morning or afternoon?"......Yeah, all really important. As others have said if your nieghbor doesn't cause you problems, why worry? Let me be clear.....I don't and wouldn't cheat on my taxes.....my reputation is too important! And, I do have a good friend that works for the IRS......cheating is wrong.....but, there are shades of gray......this sounds like one of them......let it go.....enjoy life!!!!!!

bclover 07-10-2015 06:34 AM

Quote:

Originally Posted by clifp (Post 1612565)
+1
It may or may not be a violation of the law. I think people cheating on their taxes is everyone's problems. I think sending a letter (perhaps anonymously) should be the extent of your involvement.

+1

Not sure I would do anythiing though.

Op, you cannot say 100% that the senior is not at some time living there and for the record I grew up in a NYC apartment 4 kids, 2 parents and a set of grandparents. You make do with the space you have, not everyone can afford to up and move to a mcmansion simply because their family grows.

Unless it immediately effects my health or welfare, I think long and hard before calling authorities on anyone.

bclover 07-10-2015 06:36 AM

Quote:

Originally Posted by LOL! (Post 1612569)

I think there was a similar thread recommending MYOB when employees were stealing from employers. This jist was "If Management is too stupid to see things right under their nose, then they deserve to be stolen from and I'm not going to report anything myself."


lol, until management decides to shut the business down then the employees start grumbling how unfair it is that they are out of a job while management got nice little golden parachutes. Actually happen to a firm I worked in.

MRG 07-10-2015 06:52 AM

Quote:

Originally Posted by pb4uski (Post 1612550)

.. Snip...

However, recognize that there is some risk that if the neighbor finds out that you brought your suspicions to the attention of the authorities that they will likely be made as hell (keep your car in the garage if you have one).

Agreed with the entire post. This last section was the type of BS we lived with. Keyed cars, no help from LE(not their fault ) our lives totally messed up from not MMOB. Why put a literal target on your back?

DFW_M5 07-10-2015 06:53 AM

I am not sure if this is some form of tax evasion, although I think not, but why concern yourself with it. There is enough to be concerned about in the news.

aja8888 07-10-2015 07:10 AM

Soup: If you think and old woman's (suspected) tax avoidance is bad, please go read the Greece thread!;D

Car-Guy 07-10-2015 07:30 AM

Quote:

Originally Posted by clifp (Post 1612565)
+1
It may or may not be a violation of the law. I think people cheating on their taxes is everyone's problems. I think sending a letter (perhaps anonymously) should be the extent of your involvement.

+1

karen1972 07-10-2015 07:58 AM

Quote:

Originally Posted by marko (Post 1612566)
Gaming the system, whether avoiding taxes (property, income, excise, liquor, sales, etc), fees, entitlements, etc is deemed a near professional sport in these parts.

Should I report my neighbor who drives 20 minutes to NH to avoid MA sales and liquor taxes? Or the guy who registers his car in NH but lives in MA to avoid sales, excise and registration fees? Or the folks who are getting multiple EBT cards and selling them for cash? What about the ones with multiple bankruptcies who buy all kinds of "stuff": cars, boats, houses with zero intention of ever paying for them? Or the older people who 'self impoverish' in order to get Medicaid pick up the nursing home tab? Or the guy who just won $2,000 off a bookie? What about the guy "working under the table" who collects unemployment?

At what point do you pick up the phone?

But this is exactly why it should be reported, I had the same issues with my neighbors, what started as small fraud became more and more fraud and then I realized like 1/2 the block was committing fraud and enough is enough, if the first one had gotten caught, the rest wouldn't have done it. Everything from the taking unemployment but not looking for a job, to cash business while taking food stamps and actually living off a trust fund, etc.

What I noticed the most during the recession is that it use to be that 1-5% of society that cheated the system which seemed to blow up to more like 20-30% were like well if others can do it why not me... it does't make a good society and not one I want to live in. There are already plenty of tax loopholes that are legit to use...no need to make up your own.

Meadbh 07-10-2015 08:04 AM

I reread the original post. There could be a myriad of legitimate reasons why the owner does not appear to be living in her home. For example, perhaps she is a perpetual traveller who maintains a residence and her daughter and family are house sitting. Perhaps she is frequently hospitalized. You just don't know. My approach would be to give her the benefit of the doubt.

In my condo complex we recently had a complaint that a resident was operating an illegal daycare, which would violate city bylaws. Turned out the resident was child minding a niece. Just normal family stuff.

soupcxan 07-10-2015 08:13 AM

The rules says you must physically occupy the property as your primary residence. The exception to this is if you move to a nursing home or hospital but intend to return to the house.

I readily admit I do not have certainty of anything. I live across the street and I regularly see the two adults and the six kids in the yard. I see other folks coming and going. I don't regularly see anyone who appears to be over 65.

The house is not a crackhouse by any stretch, but it is also not particularly well maintained. Grass is not regularly cut, cars are parked on the front lawn at times, it sounds like there is a rooster in the backyard (which is it's own code enforcement issue), etc. And the husband has just started some sort of distributorship out of his garage. So all this has raised my eyebrow.

I didn't go looking to get anyone in trouble, I came across this when I was researching my own property tax protest. But 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.

I am all for the over 65 exemption but I doubt it was intended to subsidize two healthy, employed 30-somethings with a lot of kids (if they are in fact abusing it).

karen1972 07-10-2015 08:20 AM

Quote:

Originally Posted by soupcxan (Post 1612613)

I am all for the over 65 exemption but I doubt it was intended to subsidize two healthy, employed 30-somethings with a lot of kids (if they are in fact abusing it).

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. Almost every person on my block had at least one child move home with them and often bringing their kids with them which overloaded our school district. It took 2-3 years and now they have all moved out but reality is its always unfair as A) I'm 40 and will never have kids but pay anyway B) my own father was 70 before my sister graduated so 65 is not the cut off for having kids C) with multi-generations it not a good way to figure out how many people are going to have kids going to school as many cultures will live with many generations in a home and thus would always use this exemption totally legitimately. 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.

marko 07-10-2015 08:23 AM

Quote:

Originally Posted by karen1972 (Post 1612605)
But this is exactly why it should be reported, I had the same issues with my neighbors, what started as small fraud became more and more fraud and then I realized like 1/2 the block was committing fraud and enough is enough, if the first one had gotten caught, the rest wouldn't have done it. Everything from the taking unemployment but not looking for a job, to cash business while taking food stamps and actually living off a trust fund, etc.

.

Here's the other side of the question:

Ok, so you report it. WILL THOSE IN CHARGE DO ANYTHING ABOUT IT?. Too much paperwork, too much hassle, "don't get your hands dirty", hope it goes away, hope the complaintant forgets about it. That's how it works around here anyway.

You report it, get a reputation as a crank, nothing happens except your house gets egged.

Running_Man 07-10-2015 08:44 AM

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.

https://www.youtube.com/watch?v=RUE4v1rUpSM

pb4uski 07-10-2015 08:49 AM

Quote:

Originally Posted by karen1972 (Post 1612619)
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....

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.

Bestwifeever 07-10-2015 09:11 AM

Quote:

Originally Posted by karen1972 (Post 1612605)
But this is exactly why it should be reported, I had the same issues with my neighbors, what started as small fraud became more and more fraud and then I realized like 1/2 the block was committing fraud and enough is enough, if the first one had gotten caught, the rest wouldn't have done it. Everything from the taking unemployment but not looking for a job, to cash business while taking food stamps and actually living off a trust fund, etc.

What I noticed the most during the recession is that it use to be that 1-5% of society that cheated the system which seemed to blow up to more like 20-30% were like well if others can do it why not me... it does't make a good society and not one I want to live in. There are already plenty of tax loopholes that are legit to use...no need to make up your own.

What happened when you reported your neighbors? Did your city take care of the fraud?

NW-Bound 07-10-2015 09:16 AM

Quote:

Originally Posted by pb4uski (Post 1612628)
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...

Only in recent years when I approached retirement age that I realized that SS is a pay-as-you-go system and relies on young workers to keep it going. And even if you take your money and go live on an island, you still need workers to support you in your old age, and hope that they do not turn on you.

Anyway, back on the OP's neighbor, there is no clear cut evidence that there's foul play. So, I would not jump to conclusion and do anything.

Andre1969 07-10-2015 09:18 AM

Quote:

Originally Posted by pb4uski (Post 1612628)
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.

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.

In Maryland, there's some kind of property tax credit you can get once you reach 65, but it's set up mainly to help lower income people. Combined gross household income can't be more than $60K per year, and total net worth can't exceed $200,000. $60K and $200K might sound like high-dollar amounts, but around these parts it isn't.

Of course, in our tax system, nothing is fair if you did into it far enough. For instance, I pay an extra $400 or so on my tax bill for a "front foot benefit", for my 271 feet of property that front the road. Yet my neighbors across the street, who have a flag lot with only 15 feet, only pay a few bucks. And another set of neighbors, who have no front footage, but rather a right of way across someone else's property, don't pay that fee at all. Yet, we all benefit the same from access to the road. I don't benefit any more, by paying extra. In fact, you could argue that it's a detriment to me, because I have less privacy with so much of my property facing the street. But, it balances out in other ways, I'm sure.

jim584672 07-10-2015 09:18 AM

I'm looking into the "member of clergy" property tax exemption. How involved could it be?

Andre1969 07-10-2015 09:20 AM

Oh, back to the original story, one potential consequence I thought of, with reporting the neighbors. If their taxes go up and the old lady can't afford them anymore, they might lose the house. If it goes into foreclosure, the occupants might become squatters, and ultimately trash it, and it could become a blight on the neighborhood and bring everybody's values down.

Calico 07-10-2015 09:33 AM

Having read this entire thread, some thoughts come to mind.

1. I thought I was a bit annoyed with one of my neighbors, but wow - at least he minds his own business and doesn't spend his free time trying to figure out if everyone on the block is a saint.

2. I'm truly astonished by all the emphasis on what is or isn't "fair" in this (supposed-maybe) situation. My father told me when I was 7 years old that life isn't fair, and I've never seen any evidence to contradict him in the 50+ years since then.

Technically, I suppose it isn't "fair" that I pay property taxes to support the schools, since I have always been childfree. However, as was already pointed out by a poster above, I would rather pay them and live in a community with educated children, who will someday be adults, than the alternative.

3. I live in the south, and even if I were royally annoyed with a neighbor, I wouldn't snitch on them to the authorities unless they were harming someone who could not defend themselves (child, elderly person, pet). Almost everyone here (myself excepted) has a gun (or several) and everyone has a long memory. I choose to take "live and let live" quite literally for those reasons!

4. The OP could have MUCH worse things to deal with neighbor-wise.

MoneyCat 07-10-2015 10:12 AM

Snitches get stitches.


Sent from my iPad using Tapatalk

Sue J 07-10-2015 10:25 AM

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.

pb4uski 07-10-2015 10:32 AM

Quote:

Originally Posted by karen1972 (Post 1612619)
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....

Quote:

Originally Posted by pb4uski (Post 1612628)
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.

Quote:

Originally Posted by Andre1969 (Post 1612636)
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. >:(

Music Lover 07-10-2015 10:37 AM

Quote:

Originally Posted by Andre1969 (Post 1612636)
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.

NW-Bound 07-10-2015 10:42 AM

Quote:

Originally Posted by pb4uski (Post 1612684)
...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. >:(

"Don't tax you, don't tax me, tax that fellow behind the tree!" - Russell Long, United States Senator, 1948-1987.

MRG 07-10-2015 10:47 AM

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.

meierlde 07-10-2015 10:55 AM

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.

gauss 07-10-2015 11:28 AM

Quote:

Originally Posted by soupcxan (Post 1612455)

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.

-gauss

Meadbh 07-10-2015 11:46 AM

Quote:

Originally Posted by soupcxan (Post 1612613)
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.

Quote:

Originally Posted by soupcxan (Post 1612613)
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.

target2019 07-10-2015 11:52 AM

Beware, naked link below. Look up MD property tax.

SDAT: Real Property Search

END NAKED LINK

target2019 07-10-2015 11:56 AM

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.

jerome len 07-10-2015 11:59 AM

Quote:

Originally Posted by Running_Man (Post 1612626)
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.

https://www.youtube.com/watch?v=RUE4v1rUpSM

+1

Andre1969 07-10-2015 12:10 PM

Quote:

Originally Posted by Music Lover (Post 1612688)
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.

Andre1969 07-10-2015 12:13 PM

Quote:

Originally Posted by target2019 (Post 1612722)
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?

Meadbh 07-10-2015 12:14 PM

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.

Andre1969 07-10-2015 12:27 PM

Quote:

Originally Posted by Meadbh (Post 1612733)
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

pb4uski 07-10-2015 12:36 PM

Quote:

Originally Posted by MRG (Post 1612694)
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.

NW-Bound 07-10-2015 12:56 PM

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.

Katsmeow 07-10-2015 01:00 PM

Quote:

Originally Posted by karen1972 (Post 1612619)
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.

Katsmeow 07-10-2015 01:02 PM

Quote:

Originally Posted by NW-Bound (Post 1612750)
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.

NW-Bound 07-10-2015 01:17 PM

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...

ERD50 07-10-2015 05:04 PM

Quote:

Originally Posted by Calico (Post 1612651)
Having read this entire thread, some thoughts come to mind.

...

2. I'm truly astonished by all the emphasis on what is or isn't "fair" in this (supposed-maybe) situation. My father told me when I was 7 years old that life isn't fair, and I've never seen any evidence to contradict him in the 50+ years since then.

Technically, I suppose it isn't "fair" that I pay property taxes to support the schools, since I have always been childfree. ...

I think you are misinterpreting the 'fair' thing...

According to the OP, it is a rule that to get the tax exemption, you need to reside in the home. It's not about whether the exemption rule is 'fair' or not, the question is whether the person is breaking the rule.

I think you can say that it is not 'fair' that she get the exemption if she is breaking the rules. But that's different than complaining that the exemption itself is not 'fair'.

Yes, I know life is not fair. But I still want people to obey the rules (and some will not).

-ERD50

Texas Proud 07-10-2015 05:22 PM

Quote:

Originally Posted by Andre1969 (Post 1612732)
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?


Just a thought on your front foot fee... they did something like that on a small lot my dad owned.... they rebuilt and widened the road and taxed everybody whose property touched the road.... did not tax any of the people who lived in the neighborhoods that actually needed the road widened.... so, maybe you had paid off that cost which is why it went to zero...

stephenson 07-10-2015 05:45 PM

Kinda torn, but not enough to not to act. Their failure to pay their fair share means you are paying more. Not fair, right?

Not withstanding the Libertarian nonsense, it is your business.

Drop a dime and make it clear they have to pay their pair share.


Sent from my iPad using Early Retirement Forum

karen1972 07-10-2015 05:49 PM

Quote:

Originally Posted by marko (Post 1612620)
Here's the other side of the question:

Ok, so you report it. WILL THOSE IN CHARGE DO ANYTHING ABOUT IT?. Too much paperwork, too much hassle, "don't get your hands dirty", hope it goes away, hope the complaintant forgets about it. That's how it works around here anyway.

You report it, get a reputation as a crank, nothing happens except your house gets egged.

ironically I live around a bunch or krumudgens, they will all get the blame before me :) The neighbor who doesn't mow their lawn has people call on him all the time and its a different neighbor each time. They like to call on people for loud noise or miskept lawn or unpainted fence.. is this any different?

pb4uski 07-10-2015 06:02 PM

The difference here is that the OP's neighbor may be committing fraud... a lot different than long grass or loud music IMO.

karen1972 07-10-2015 06:03 PM

Quote:

Originally Posted by Katsmeow (Post 1612752)
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.

It does vary greatly state to state. In Illinois you get an exemption for the # of years you lived in a home, so people who bought their house 60 years ago have the greatest deductions. Then they cap at 65 where they pay NO increase in taxes and it actually states because they don't have kids in the passage of that ruling. I pay my taxes and have no deductions and do it because I'm sure others will benefit and its good for society, just where I lived it was all the 60+ that were always whining about how bad they have it. I have a hard time that you are getting an exemption so you can "afford" it when I know you have millions in the bank and living in a million dollar home. There is something in my mind I just can't wrap my head around...and as the population ages this is going to skew it very heavy for the new people moving in...and then the older generation wonders why no one is buying their house because of the high property taxes.... I'm just highlighting how circular and frustrating this whole problem is.

harley 07-10-2015 06:06 PM

Quote:

Originally Posted by karen1972 (Post 1612872)
ironically I live around a bunch or krumudgens, they will all get the blame before me :) The neighbor who doesn't mow their lawn has people call on him all the time and its a different neighbor each time. They like to call on people for loud noise or miskept lawn or unpainted fence.. is this any different?

Yes, because while you can hear loud music and see unpainted fences and overly long grass, in the OP's case they don't KNOW anything about what the reality of the situation is, they just suspect something. And despite my libertarian opinions being labeled nonsense, I just don't believe in putting on my brown shirt and "dropping a dime" on a neighbor for a suspected misbehavior. I wouldn't do it on the long grassed, unpainted, loud music lovers, and I certainly wouldn't do it on a saintly ole granma, even if she might secretly be Ma Barker. Not without a body.

pb4uski 07-10-2015 06:07 PM

For God's sake, let's not use Illinois as an example of anything. No disrespect to anyone who live there (including my dear sister) but it seems to be one of the most screwed up states in the union.

Calico 07-10-2015 06:21 PM

Quote:

Originally Posted by harley (Post 1612879)
Yes, because while you can hear loud music and see unpainted fences and overly long grass, in the OP's case they don't KNOW anything about what the reality of the situation is, they just suspect something. And despite my libertarian opinions being labeled nonsense, I just don't believe in putting on my brown shirt and "dropping a dime" on a neighbor for a suspected misbehavior. I wouldn't do it on the long grassed, unpainted, loud music lovers, and I certainly wouldn't do it on a saintly ole granma, even if she might secretly be Ma Barker. Not without a body.

+100

I think this weekend I'm going to bake my two closest (geographically speaking) neighbors some brownies to thank them for not being Nosy Parkers.

ERD50 07-10-2015 06:30 PM

Quote:

Originally Posted by pb4uski (Post 1612880)
For God's sake, let's not use Illinois as an example of anything. No disrespect to anyone who live there (including my dear sister) but it seems to be one of the most screwed up states in the union.


True, but if we don't at least serve as an example to others of what not to do, what good are we at all? :facepalm:

-ERD50 (from Northern IL)

Whisper66 07-10-2015 06:39 PM

Is this tax fraud? What would you do?

If this isn't her primary residence, it is clearly fraud.

I'm personally sick of all the people that fraudulently abuse our country's benefits, including social programs and the tax system. If we expect this country to continue to be land of opportunity that it is supposed to be, then individual citizens like ourselves have to step up to the plate and assist the government we elect (and pay for) get the right benefits to the people who need / deserve it.

I'd first write a letter to the appropriate taxing authority. I personally would sign it but understand others would do so anonymously. I have no problem either way and don't really care if someone skimming off my country doesn't care for my actions. Nor do I care if other neighbors feel similarly. I care more about the people who are not getting benefits they need because of tax cheats, etc...

Second, I'd bring it again to the authority's notice by using that person's property value / tax rate in my yearly challenge of my own property taxes. When the board reps pointed out the exemption, I would just point out that no one over 65 lives there.....but be ready with updated package without that data and move on.

Just one person's ideas. Clearly not aligned with many here but that's one thing that makes our country great.

samclem 07-10-2015 06:54 PM

Quote:

Originally Posted by Whisper66 (Post 1612894)
I'm personally sick of all the people that fraudulently abuse our country's benefits, including social programs and the tax system.

If the tax system is a "benefit", then I'd like to leave my share of that one to others. :)

stephenson 07-10-2015 07:47 PM

Jeez...the issue isn't related to a political philosophy ...it's related to each of us being RESPONSIBLE for paying our fair share. This isn't a game, it's pragmatic management. If your neighbor is cheating you/we are being damaged.


Sent from my iPad using Early Retirement Forum

FANOFJESUS 07-10-2015 07:51 PM

Quote:

Originally Posted by soupcxan (Post 1612455)
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.

She might also have a fraction of your income so if it were me I would stay out of it. I would bet you make a lot more than the 4k to 6k she is saving. I would also guess that the couple with six kids are not loaded with money either. So who gets hurt in the end the older lady or the kids? It does not sound like a battle I would want to win.

haha 07-10-2015 10:55 PM

Looks like there are not very many hall monitors here.

I'm relieved.


Ha

NW-Bound 07-10-2015 11:39 PM

Fewer things get people more excited than talking about taxes. It's probably because nobody is stranger to taxes. This is a lively discussion. People have different viewpoints, and all have some merits. I love it.

pb4uski 07-11-2015 01:43 AM

Quote:

Originally Posted by rec7 (Post 1612916)
She might also have a fraction of your income so if it were me I would stay out of it. I would bet you make a lot more than the 4k to 6k she is saving. I would also guess that the couple with six kids are not loaded with money either. So who gets hurt in the end the older lady or the kids? It does not sound like a battle I would want to win.

Whoa. Her income has no bearing on her obligation to comply with the law.

If she can't afford the property taxes, in most states there are programs for that. Even if after those programs she can't afford the property tax then the remedy is for her to sell the property, not to cheat the system which is unfair to all the rest of us.

freebird5825 07-11-2015 03:57 AM

Quote:

Originally Posted by rec7 (Post 1612916)
She might also have a fraction of your income so if it were me I would stay out of it. I would bet you make a lot more than the 4k to 6k she is saving. I would also guess that the couple with six kids are not loaded with money either. So who gets hurt in the end the older lady or the kids? It does not sound like a battle I would want to win.

A light bulb just went off in my head...imagine for a moment the clamor and busy-ness of a home with 6 children in it. Add to that perhaps two parents who may not be getting along because money is tight, and one or both parents of the 6 kids is frazzled from too many hours of w*rk trying to support the brood.

Maybe Grandma isn't at the house a lot because she needs peace and quiet. She may have a kind friend who lets her stay at her house so she can have some time to herself.

Or perhaps she is trying to avoid the unpaid live in 24/7 child care deal that so many grandparents (especially grandmothers) find themselves locked into.

I will further speculate that she allowed the couple and kids to move in to help with expenses, and may now regret it. It would explain her absence.

She's outnumbered.

There is no mention of a grandfather. Divorced ? Windowed ? It is possible that the couple talked her into letting them move in so she wouldn't be alone, and to help with maintenance . I knew a local woman who did that, and regretted it for the rest of her life. She felt like a stranger in her own home. Her daughter and kids and BF cost her more in the long run than any "help" they supposedly provided. This lady w*rked all the time versus being at her own house amidst the clamor.

6miths 07-11-2015 06:03 AM

Quote:

Originally Posted by karen1972 (Post 1612872)
ironically I live around a bunch or krumudgens, they will all get the blame before me :) The neighbor who doesn't mow their lawn has people call on him all the time and its a different neighbor each time. They like to call on people for loud noise or miskept lawn or unpainted fence.. is this any different?

It's funny, in my neighborhood and my mom's, if your lawn was getting a bit long someone would more likely be coming to the door to make sure everything was ok or to ask you if you wanted them to cut your grass. I've long since lost count of the times that I have cut neighbors' grass or pulled a few weeds. A saw an obituary the other day and one of the observations regarding the fellow was that he was known for voluntarily cutting grass all over the neighborhood. There are worse ways to be remembered!

I'd probably let it slide even if I thought they were outside the lines. If they were renting it out to non-family or being 'bad' neighbors then I might be driven to act.

samclem 07-11-2015 06:16 AM

Quote:

Originally Posted by haha (Post 1612946)
Looks like there are not very many hall monitors here.

I'm relieved.


Ha

There are lots of factors. I've reported several people for shoplifting in progress--the law and the infraction are free of grey areas, I was sure of what I saw, somebody was being harmed, so it was not a hard call.


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