Neighbor not paying her fair share of property tax?

[marko]

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

See Sam! You got it all wrong. It's not a tax, it's a benefit.

 

[stephenson]

Very interesting breakout of those of us willing to "let it slide" and those somewhat incensed by paying for someone else's infringement of the law, or even illegal activity.

Wonder how the two sides would feel if it was their banking or investment company explaining to them why they needed to average returns on investments because some people chose a lower yielding investment over a higher yielding investment?

This is the reason the law and hence enforcement has to be a bit cold ...it is, in the end, about right and wrong.


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[samclem]

This is the reason the law and hence enforcement has to be a bit cold ...it is, in the end, about right and wrong.

It's also a reason that laws (incl taxes) should be enforceable (at reasonable expense). If a law is not enforced, then the honest folks will obey it and the dishonest ones won't, thus it serves as a tax on honesty. Laws that are easily and profitably skirted diminish respect for the law and ultimately weaken the social fabric.

If a county writes a law saying the oldster has to physically live in the house 185 nights per year to get the favorable tax treatment, then they need to be prepared to have their minions doing bed checks and asking for IDs.

 

[Another Reader]

It's also a reason that laws (incl taxes) should be enforceable (at reasonable expense). If a law is not enforced, then the honest folks will obey it and the dishonest ones won't, thus it serves as a tax on honesty. Laws that are easily and profitably skirted diminish respect for the law and ultimately weaken the social fabric.

If a county writes a law saying the oldster has to physically live in the house 185 nights per year to get the favorable tax treatment, then they need to be prepared to have their minions doing bed checks and asking for IDs.

Sorry, I'm not willing to pay for that. It's another level of government we don't need. I don't live in a subdivision with a homeowners' association for the same reason.

 

[samclem]

Sorry, I'm not willing to pay for that. It's another level of government we don't need. I don't live in a subdivision with a homeowners' association for the same reason.

Of course. That's a good reason not to write a law that requires intrusive enforcement.

 

[MichaelB]

Very interesting breakout of those of us willing to "let it slide" and those somewhat incensed by paying for someone else's infringement of the law, or even illegal activity.

Let it slide or presumed innocence? When was it determined that there indeed exists a violation of property tax law?

 

[Sunset]

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...

I'm sure there are many cases where they defer for 20 years and when the person dies, there is not enough money in the estate to pay the deferred tax bill.

So just like taxes, you charge a little extra to make up for the ones who don't/can't pay.

 

[Bestwifeever]

I have called our municipality many years ago on a neighbor who was renting his backyard to a lawn mowing service, pretty obvious violation with the commercial equipment and the workers showing up at 6:30 every morning and the big pile of grass clippings stored there til they were hauled away. In the OP's case though I like many here pointed out the owner could be in nursing home care as he sees an older woman at the property occasionally. if I were OP and it bothered me that much I would definitely contact the authorities and ask some questions, but there could be unintended consequences as a result that he might regret unleashing if he really turns her in.

 

[NW-Bound]

Let it slide or presumed innocence? When was it determined that there indeed exists a violation of property tax law?

+1. All the OP has is just suspicion.

See the conflicts the tax law creates when it treats some people, the elderly in this case, as being "more equal". The more I think about it, the more sense it is to let them defer it, then take it out of the estate when they pass. If there is not enough in the estate, then of course it will be forgiven, no different than other debts.

 

[poorcarver]

And lets be very sure about what "residence" means in your state. I am not an attorney but I am advised that in our state "residence" means what you use for an address and where your "permanent address" is. For example, my son was in the Army for four years, other than a very few visits home, he was never physically in the state. Nonetheless his "residence" was our state and this address. Likewise I understand that my home is my permanent residence regardless of the fact if I choose to travel more than half the year out of state. Further I am advised that if I have two "addresses" in separate states, I can call which ever one I like my permanent address so long as more time is spent in that one as opposed to the other especially if I register my car, get a drivers license and vote in the selected state. I understand this is a touchy issue with various states some more aggressive than others about the residency thing than others.

 

[Texas Proud]

OK... let's get some 'law' in the thread...

This is from a form you have to fill out....

GENERAL RESIDENCE HOMESTEAD EXEMPTION
(Tax Code Section 11.13):
You may qualify for this exemption if for the current year and, if filing a late application, for the year for which you are seeking an exemption: (1) you owned this property on January 1; (2) you occupied it as your principal residence on January 1; and (3) you and your spouse do not claim a residence homestead exemption on any other property.


AGE 65 OR OLDER EXEMPTION
(Tax Code Section 11.13(c), (d)):
You may qualify for this exemption if you are 65 years of age or
older. You may qualify for the year in which you become age 65. You cannot receive a disability exemption if you receive this exemption




​

No mention of how long you have to live in the property.... just one day as far as I can tell....



BTW, I claimed my house as my primary resident for 4 years and did not live in it... I worked overseas one year and in NYC for 3 in company apt.. But every year I took off Christmas and New Years and came home for the holidays.... and was living in my house on Jan 1.... so, by the law I was good to go....



Edit to add... they do say this is a brief description and you should look at the tax code to get the complete working....

 

[soupcxan]

Then you get into what does it mean to "occupy" a house.

definitions for terms used in Tax Code Section 11.13 are: "principal residence" is the owner's primary or chief residence that the owner actually occupies on a regular basis; "temporary" refers to a limited or short absence of the owner from the residence homestead. What constitutes a 'temporary' period of absence from the residence homestead necessarily depends on the particular circumstances: the length of the home owner's absence and whether the home owner has established another principal residence and whether the owner intends to return and occupy the residence as his or her principal residence. The length of the period probably is less important than the establishment of a different principal residence and the owner's intent to return and occupy the residence as a principal residence. Op. Tex. Att'y Gen. No. JC-415

 

[mickeyd]

Is this tax fraud? What would you do?

Turn the lousy tax evader in and ask for a reward due to your astute detective work on behalf of the county tax assessor/collector.

 

[Another Reader]

Ah, the slippery slope of intent. The Assessor is going to say unless you can prove that she has established another primary residence and/or has no "intent" to return, please don't bother us.

 

[Whisper66]

Ah, the slippery slope of intent. The Assessor is going to say unless you can prove that she has established another primary residence and/or has no "intent" to return, please don't bother us.

That's certainly a realistic possibility. On the other hand, they might appreciate the concerned citizen's input, look into the matter, determine if there really is an intended fraud or not and act accordingly. Never know unless you take the first step.

 

[Another Reader]

As someone that spent some years managing a local government agency department that was a target for tattletales and self-righteous busybodies, this law was written to make sure the Assessors won't have to chase down every report of abuse. My instructions to my front line staff in this situation would be to respond as follows.


"Sir, we appreciate your concern. However, we have no proof that your neighbor has established another permanent residence and that s/he has no intent of returning. Without proof that your neighbor has established another permanent residence and proof of his/her intent not to return, there is no legal basis for further action. Thank you for your concern and have a nice day."

 

[daylatedollarshort]

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.

There are many retirees in our neighborhood who bought houses for under $100K but if their property tax bill went to current rates the tax bill alone alone would consume close to 100% of an average retiree monthly SS benefits. We can't ship everyone over 65 here to Arkansas or some other lower cost of living place. Many have lived here their whole lives and their children and grandchildren live locally.

 

[NW-Bound]

There are many retirees in our neighborhood who bought houses for under $100K but if their property tax bill went to current rates the tax bill alone alone would consume close to 100% of an average retiree monthly SS benefits. We can't ship everyone over 65 here to Arkansas or some other lower cost of living place.

For their house to have that tax rate, which their new neighbors are paying without the protection of Prop. 13, their house must have a very high market value. I bet it's several times higher than their initial $100K.

No, we do not want to send them to Arkansas against their will. So, we could let them defer, then take it from their heirs later. Sounds fair?

Or they may want to sell and move to Arkansas on their own, pocket a huge amount of money as they buy a much less expensive home, invest it for a nice income while paying a new lower tax to boot.

 

[Another Reader]

For their house to have that tax rate, which their new neighbors are paying without the protection of Prop. 13, their house must have a very high market value. I bet it's several times higher than their initial $100K.

No, we do not want to send them to Arkansas against their will. So, we could let them defer, then take it from their heirs later. Sounds fair?

Or they may want to sell and move to Arkansas on their own, pocket a huge amount of money as they buy a much less expensive home, invest it for a nice income while paying a new lower tax to boot.

When you buy a house in California, you know going in what the basis of your taxes will be. You don't have to fear losing your house when there is a run up in prices, as so many people did in the late 1970's. None of this whatever the City, County, or school district would like to spend this year nonsense. If you don't like the system or your tax responsibility, don't buy. As to the argument that tax revenues are diminished by Prop 13? Nope. Property tax revenue increases every year, due to changes in ownership and new construction.

 

[NW-Bound]

... If you don't like the system or your tax responsibility, don't buy. As to the argument that tax revenues are diminished by Prop 13? Nope. Property tax revenue increases every year, due to changes in ownership and new construction.

If I were a long-time home owner in CA, I'd love this Prop.13 too, particularly when I see my new neighbors paying 5X what I do. The tax responsibility weighs more on their shoulders than on mine. How can that be not fair?

True, if newcomers do not like it, then they do not buy. I myself would never be one of the suckers. But as you noted, there are plenty of those.

PS. CA also has this Mello Roos additional tax on new subdivisions. This, I can see the basis for, as it pays for development of new facilities that the new homes require.

PPS. A while back, I read about schoolteachers in some districts lamenting about not having enough funding due to Prop. 13. Apparently, not every place has a sufficiently high influx of newcomers to bear the brunt. Proposition 13 limits the tax increase to no more than 2%, which often trails inflation rate. Over a long time, that builds up to a high deficit. People's incomes, even SS, generally track inflation rate.

 

[soupcxan]

My instructions to my front line staff in this situation would be to respond as follows.

That's certainly possible, but our tax assessor has been aggressively jacking up everyone's valuation lately, so I assume they would be interested in the extra revenue.

 

[Shanky]

I saw someone going 77 in a 70 speed zone. I know they were breaking the law. Should I get in front of them and go 70 in the fast lane? The highway patrol won't listen to me anymore


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[daylatedollarshort]

PPS. A while back, I read about schoolteachers in some districts lamenting about not having enough funding due to Prop. 13. Apparently, not every place has a sufficiently high influx of newcomers to bear the brunt. Proposition 13 limits the tax increase to no more than 2%, which often trails inflation rate. Over a long time, that builds up to a high deficit. People's incomes, even SS, generally track inflation rate.

Taxes for education do not only have to come out of only property taxes. Prop 30 added funds for education through sales taxes and taxes on incomes over $250K.

 

[NW-Bound]

Not being a resident of CA, I did not know about Prop. 30, so just looked it up. Passed recently in 2012, it raised sales tax by 0.25%, but only for 4 years. It also raised taxes on incomes over $250K.

The schoolteachers' lament about short funding I read about was in an article in a National Geographic issue, who knows how long ago. So, it predates this Prop. 30, which tried to remedy the problem.

It is always a good idea to limit tax increases, else politicians will find all kinds of pet projects to spend money on. But it's a big problem to cap the limit to below inflation rate, something that even SS recipients get.

Warren Buffet thought that Prop. 13 should be modified. I do not know the details, but it was a no brainer that it went nowhere. Once people get this "benefit", you can only pry it out of their dead ballot clutching hands. We see that in Greece recent ballot result about the Euro bailout.

 

[karen1972]

As someone that spent some years managing a local government agency department that was a target for tattletales and self-righteous busybodies, this law was written to make sure the Assessors won't have to chase down every report of abuse. My instructions to my front line staff in this situation would be to respond as follows.


"Sir, we appreciate your concern. However, we have no proof that your neighbor has established another permanent residence and that s/he has no intent of returning. Without proof that your neighbor has established another permanent residence and proof of his/her intent not to return, there is no legal basis for further action. Thank you for your concern and have a nice day."

curious so your saying you wouldn't even do a quick look to see if this person doesnt' have a drivers license elsewhere or has another home they are also claiming on? If that were the case, then I guess the government is saying we never catch fraud so who cares everyone do it?

btw, I've often wondered this because I have suspicion friends who owns many rental properties claimed every home as a primary residence and I for some reason assumed the government would track that..but maybe not... maybe I'm the only stupid honest person in the country that paid full rate on my secondary home.